Regulatory Alerts2022-05-17
Regulatory Impact Statement: Capital Treatment of Variable Annuity Business
The Reserve Bank of New Zealand proposes revised capital requirements for variable annuity business to address the inadequacy of existing solvency standards for complex product risks. The preferred option allows insurers to use internal modelling and dynamic hedging, subject to independent actuarial review and the maintenance of separate statutory funds. This regulatory change aims to foster market efficiency and innovation while ensuring capital requirements remain appropriately conservative and risk-based.
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