Regulatory Alerts2022-05-17
Solvency Standard for Captive Insurers Transacting Non-life Insurance Business 2014
The Reserve Bank of New Zealand issued this standard to establish a modified solvency framework for licensed captive insurers transacting non-life insurance business in New Zealand, effective January 1, 2015. The regulation incorporates the 2014 Non-life Insurance Solvency Standard while significantly reducing the Fixed Capital Amount to one million New Zealand dollars and replacing catastrophe risk charges with a fixed Insurance Risk Capital Charge equal to 20% of the largest per-event retention plus reinstatement costs. It further adjusts capital resilience factors to exclude certain unpaid premium exposures, introduces specific limits for transactions with parent entities, and mandates that appointed actuaries advise on insurance liabilities at a minimum 75% probability of sufficiency.