Regulatory Alerts2022-05-17
Response to submissions on the quality of capital and other revisions to solvency standards
The Reserve Bank of New Zealand issued this document to summarize feedback on proposals to revise the definition of capital and other solvency standards for insurers. The Reserve Bank rejected adopting a tiered capital approach for the insurance sector at this time, citing calibration issues and the current predominance of high-quality capital instruments. Key changes include maintaining limits on perpetual non-cumulative preference shares, allowing issuance through special purpose vehicles, and removing qualifying criteria for reserves from the capital definition.
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