Reserve Bank of New Zealand Guideline on Licensing Conditions for Insurers Not Yet Commenced Business

Insurer that has not yet commenced business Guidelines Licensed insurers Insurance Policy Prudential Supervision Department February 2011 Ref #4305360

2 Purpose of this guideline 1 This document sets out the Reserve Bank of New Zealand’s (Reserve Bank) guidelines in relation to conditions placed upon a licensed insurer that has not yet commenced business. 2 The Insurance (Prudential Supervision) Act 2010 (the Act) allows the Reserve Bank to impose two types of conditions on an insurer that, at the time of making a licence application, has not yet commenced business. 3 The purpose of this guideline is to clarify how the conditions will apply. 4 This guideline relates solely to the requirements under the Act, and does not cover requirements of other legislation that may also be of relevance to licensed insurers. 5 Nothing in this guide overrides the provisions of the Act. Licensing for new insurers 6 Persons who want to commence carrying on insurance business in New Zealand after 7 September 2010 must obtain a full licence before commencing business. These persons will need to provide the Reserve Bank with information to satisfy all licensing requirements as described in section 19. 7 For further information refer to our guideline on Application for a licence. Licensing conditions for insurers that have not yet commenced business 8 Section 21(2)(e) of the Act provides for the Reserve Bank to impose two types of condition on a person that, at the time of making a licence application, has not yet commenced business. One or both of these conditions may be applied to specify: (a) the time period within which a person must commence carrying on insurance business in New Zealand; and (b) an amount of insurance business in New Zealand that an insurer must have within a specified period. 9 These conditions will be used to enforce the requirement that entitlement to a licence is based on: (a) a definite and time-bound intention to carry on insurance business in New Zealand; and (b) a genuine business plan to gain business. 10 A person that is unsure of the timeframe in which they will commence business or who is applying for a licence for other reasons, such as name protection, will not be granted a licence. Similarly, a person who, for whatever reason, intends to gain a licence but does not intend to carry on insurance business in New Zealand will not be granted a licence. Contact 11 A person that wants to apply for a licence but who is not yet carrying on insurance business in New Zealand is encouraged to contact the Reserve Bank to discuss their plans. The contact is: (a) Contact us on Reserve Bank’s website; and (b) Phone enquiries to: +64 4 471 3591. Ref #4305360

3

Website http://www.rbnz.govt.nz/regulation-and-supervision/insurers Email insurance@rbnz.govt.nz Telephone +64 4 471 3591 Mail Reserve Bank of New Zealand Prudential Supervision – Insurance Policy PO Box 2498 WELLINGTON 6140 Ref #4305360