Regulatory Alerts2022-05-17
Independent Review of the Supervision of CBL Insurance Ltd by the RBNZ
The Reserve Bank of New Zealand commissioned an independent review of its prudential supervision of CBL Insurance Ltd following the insurer's 2018 liquidation due to severe under-reserving. The review found that while the Bank's initial licensing was sound, it failed to act decisively on early suspicions of solvency issues between 2014 and 2016, largely due to resource constraints and over-reliance on the Appointed Actuary's advice. The report recommends that the Bank adopt a more pre-emptive supervisory stance, strengthen governance obligations, and amend the Insurance Act to introduce group supervision and more flexible solency triggers.
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