Establishing Insurance Business in New Zealand
[ Last Updated 16 April 2007 ]
The following information is general information only and the application of the relevant legislation will depend upon the circumstances of the organisation and the particular types of insurance which they are seeking to promote.
Insurance Companies Deposits Act 1953
Before commencing insurance business all insurers (except those carrying on life or earthquake insurance business) and all agents of overseas insurers must lodge a deposit with the Public Trustee under the provisions of the above mentioned Act.
There are different provisions which apply to different types of insurance. A deposit of NZ$500,000, must however, be made by every person or company (other than a mutual insurance association carrying on any class of business (except life or earthquake business) after 26 August 1974; and every agent of an overseas insurer in respect of any class of business (except life or earthquake business) after 26 August 1974. Note in particular that for every person who commences after 26 August 1974 to carry on in New Zealand marine insurance business, or to act in New Zealand as an underwriter in respect of marine insurance business, or to act in New Zealand as agent of a Commonwealth underwriter or of a foreign underwriter in respect of marine insurance business the same deposit would be required.
In addition, this Act requires that every insurer or agent lodge within 9 months of the close of each financial year audited financial statements, in the form prescribed in the schedule to the Act, of their business conducted in or from New Zealand for the previous year. There are significant penalties for failure to comply with this Act.
A PDF of the most recently lodged insurance return can be obtained by emailing the Insurance and Superannuation unit at isu@isu.govt.nz.
A full list of insurance companies who have a deposit lodged with the Public Trustee under this Act is available.
Insurance Companies (Ratings and Inspections) Act 1994
Every insurer that carries on disaster or general insurance business in New Zealand must obtain from an "approved agency" a current rating of its claim paying ability. If an insurer enters into contracts of insurance with New Zealanders, albeit through an agent or broker, it is possible that this Act would apply. An "approved agency" is a person or organisation who, on the recommendation of the Insurance Council of New Zealand is approved for this purpose by the Registrar of Companies.
The insurer is required to register the rating and any change in rating with the Registrar of Companies and to disclose the rating before entering into or renewing a contract of insurance (other than a contract solely of life insurance). In certain circumstances if an insurer does not carry on business in New Zealand the Act imposes certain disclosure requirements upon the intermediary prior to the contract being entered into. The information to be disclosed includes the most recent rating of the insurer given by an agency generally recognised by the insurance industry in New Zealand and overseas as competent to assess the claims paying ability of insurers and the date on which it was given.
The Guide to the Ratings Act provides further details on obtaining, registering and disclosing a rating under the Act.
Life Insurance Act 1908
An insurer prior to commencing business in New Zealand must lodge a deposit of $500,000 with the Public Trustee and every foreign company shall, before doing business in New Zealand, appoint in writing a person resident therein as general agent, on whom all lawful processes against the company may be served with like effect as if the company existed in New Zealand; and the said writing or power of attorney shall stipulate and agree, on the part of the company making the same, that any lawful process against the company which is served on the said general agent shall be of the same legal force and validity as if served on the company.
A copy of the writing, duly certified and authenticated, shall be filed with the Chief Executive of the Ministry of Economic Development, and copies certified by him shall be sufficient evidence (section 34 of the Life Insurance Act 1908).
There is also a requirement to lodge an annual return with us within 9 months of the balance date of the company. The content of the return is specified in the schedules to the Life Insurance Act 1908.
A PDF of the most recently lodged insurance return can be obtained by emailing the Insurance and Superannuation unit at isu@isu.govt.nz.
A full list of insurance companies who have a deposit lodged with the Public Trustee under this Act.
Marine Insurance
In addition to the legislation referred to above there are specific acts governing the carrying on of marine insurance.
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