new zealand insurance companies
New Zealand:Insurers focus on conduct and culture
Insurance companies in New Zealand are currently preparing for a change to their operating environment with the Impending Financial Markets (Conduct of Institutions) Amendment Bill (CoFi Bill), notes the insurance broking firm Crombie Lockwood.
In a commentary titled “Focus on conduct and culture” posted on its website, Crombie Lockwood said, “This Bill represents a major upheaval to the way the New Zealand insurance market is regulated. It should be good news for consumers as insurance companies will now have an obligation to comply with a principle-based fair conduct regulation regime. As a result of this change, insurers will have to look more carefully at the products that they provide to insureds and also consider the associated pricing.”
The Bill has passed its second reading and is expected to come into force in 2023.
Environmental, Social and Governance (ESG) responsibilities are another side of the focus on conduct and culture.
These impact both insurers directly and their customers. The majority of the insurance companies operating in New Zealand are publicly listed companies and have significant ESG obligations. These are immediately impacting some of the business that they are willing to underwrite.
For example, some insurers have publicly stated that their commitment to ESG means that they will no longer consider accepting risks that involve thermal coal mining extraction projects or thermal coal electricity generation and are actively seeking to increase their exposure to businesses that have a positive environmental impact.
There are also other restrictions being placed on industry sectors such as weapons manufacturing and on tobacco or recreational cannabis products. Crombie Lockwood anticipates that insurers’ appetite for businesses that have a negative impact on either the climate, environment or social landscape will reduce over time.
In October the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill was granted Royal Assent, which makes New Zealand the first country in the world to make climate-risk disclosures mandatory for some financial sector organisations. Large financial institutions and certain equity and debt issuers listed on New Zealand’s Exchange (NZX) now need to disclose climate-related information about governance, risk management, strategy and metrics and targets.
For insurers of directors and officers risks, it is now common practice to ask for more details on how boards manage risks relating to environmental, social and governance reporting and also how the business addresses COVID-19 and cyber risk.
Former NY Chief Insurance Regulator joins Lemonade
Digital insurance company Lemonade has announced the appointment of Scott Fischer as Head of Government Relations and co-General Counsel.
As Lemonade’s first Head of Government Relations, Fischer will provide strategic counsel regarding laws and regulations impacting the company and guide strategy around relationships with key stakeholders throughout the insurance regulatory community.
In addition to serving as Head of Government Relations, Fischer will serve as co-General Counsel alongside Bill Latza, who plans to retire at year end.
Most recently, Fischer was a partner at global law firm DLA Piper, where he represented international, national, and local insurers and producers in their regulatory and compliance activities.
Notably, Fischer worked with New York’s insurance regulator for nearly 10 years, during which time he led a unit supervising approximately 1,700 insurers operating in New York with assets exceeding $4 trillion.
“I spent years regulating an industry that’s been operating the same way because, simply put, that’s the way it’s always been done. Not with Lemonade,” said Fischer.
“They’ve been challenging this orthodoxy since day one when I granted their license to operate in New York. Now things have come full circle, and I get to be part of the fun, helping Lemonade grow and reimagine the industry in a tech-first world.”
“Scott played a make-or-break role in Lemonade’s early days, as the regulator who scrutinized our business, gave us a hard time, and ultimately gave us our license!” added Daniel Schreiber, Lemonade CEO and cofounder.
“He was a thoughtful, fair minded, and exacting regulator, and his deep familiarity with insurance regulation on the one hand, and Lemonade on the other, make him the ideal leader of our government relations efforts.”
top 3 insurance company in New Zealand