This file is Bob's plain-language reference for the two New Zealand regimes that sit behind an insurer: prudential supervision (is the insurer financially sound enough to pay claims?) and conduct licensing (does the institution treat consumers fairly?). It mirrors the Australian file's APRA/ASIC coverage so the two jurisdictions can be compared cleanly. New Zealand splits these jobs between the Reserve Bank of New Zealand (RBNZ, prudential) and the Financial Markets Authority (FMA, conduct), which is broadly similar to Australia's "twin peaks". Everything below is written in our own words from public government sources, carries no client PII and no premiums, and is draft until a reviewer signs off.
NZ's two-regulator split (RBNZ prudential, FMA conduct)
New Zealand divides oversight of an insurer between two regulators, each with a different question to answer. The Reserve Bank of New Zealand (RBNZ, Te Pūtea Matua) is the prudential regulator: it watches whether a licensed insurer is financially sound enough to meet its promises to policyholders, mainly through licensing, capital/solvency requirements and supervision. The Financial Markets Authority (FMA, Te Mana Tātai Hokohoko) is the conduct regulator: it watches how financial firms behave with consumers (licensing of conduct and of financial advice, disclosure, fair treatment). This is broadly the same idea as Australia's "twin peaks" model, where APRA does prudential and ASIC does conduct.
For Bob, the practical point is that a New Zealand life or income protection insurer answers to RBNZ for its financial soundness and to FMA for its conduct and (separately) for financial advice. Bob does not deal with RBNZ directly; what matters to Bob's users is that the insurer behind their cover sits inside this prudential safety net and inside the FMA's conduct rules.
Source: RBNZ, How we regulate insurers (https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-insurers/how-we-regulate-and-supervise-insurers/how-we-regulate-insurers) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft
IPSA: the prudential law for insurers
New Zealand's prudential rules for insurers live in the Insurance (Prudential Supervision) Act 2010 (IPSA). IPSA applies to insurers carrying on insurance business in New Zealand and gives RBNZ three core jobs: (1) a licensing system, so an insurer must be licensed and meet prudential requirements to operate; (2) ongoing supervision of compliance with those prudential requirements; and (3) powers to act in respect of an insurer that is in financial distress or other difficulty, or that is not complying with the Act.
IPSA's design places primary responsibility and accountability for an insurance business with the insurer's own board and senior management. RBNZ describes this as a framework that relies on effective self-discipline and market discipline, with the regulator setting standards and supervising rather than running the business. That is a lighter-touch philosophy than some overseas regimes, and it is one of the things the current IPSA review is revisiting (see the review section below).
For Bob: IPSA is the NZ counterpart to Australia's Life Insurance Act 1995 plus APRA's prudential standards. It is the reason a licensed NZ insurer has to hold capital and stay solvent, which underpins the credibility of any cover Bob helps a client arrange.
Source: RBNZ, How we regulate insurers (https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-insurers/how-we-regulate-and-supervise-insurers/how-we-regulate-insurers) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft
Insurer licensing under IPSA
Under IPSA an insurer must hold a licence from RBNZ to carry on insurance business in New Zealand, and the licence comes with conditions the insurer must keep meeting. Licensing is the gate: to be granted and keep a licence, an insurer has to satisfy RBNZ on prudential matters such as adequate capital and solvency, suitable governance, and the "fit and proper" standing of its board and senior managers. RBNZ maintains a public Register of licensed insurers so anyone can check whether a given insurer is licensed.
Some categories of insurer or arrangement can be declared outside the Act or granted exemptions (for example, overseas insurers may be exempted from the New Zealand statutory-fund requirement where their home jurisdiction already requires an equivalent separation of life insurance obligations). These declarations and exemptions are themselves published by RBNZ.
For Bob: only deal with, and only refer clients toward, insurers that are licensed under IPSA. Whether a particular insurer is licensed (and under what conditions) should be checked against RBNZ's public register rather than assumed. [VERIFY] the current licensed status of any specific insurer at the time of use.
Source: RBNZ, Register of licensed insurers (https://www.rbnz.govt.nz/regulation-and-supervision/cross-sector-oversight/registers-of-entities-we-regulate/register-of-licensed-insurers) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft
Solvency standards (minimum capital)
A central prudential lever in IPSA is the solvency standard. Solvency standards are issued by RBNZ under section 55 of IPSA, and one or more of them apply to a licensed insurer through that insurer's conditions of licence. In plain terms, a solvency standard sets the minimum amount of capital an insurer must hold so that, even if adverse outcomes occur, the company still has enough funds to meet its promises to policyholders.
RBNZ has run a separate review of insurance solvency standards alongside the broader IPSA review, working toward an updated structure. There has been an Interim Solvency Standard used during this transition. [VERIFIED-AI 2026-06-21: the standard in force is the Interim Solvency Standard 2023 (came into force 1 January 2023); a consolidated version incorporating the Second Amendment (the Interim Solvency Standard Amendment Standard 2024), the "2A" consolidated standard, is effective for all NZ-licensed insurers from 1 March 2025. No minimum-capital figures are quoted, per corpus policy. Source: rbnz.govt.nz, standards and requirements for insurers.]
For Bob: this is the NZ equivalent of APRA's capital/solvency standards (e.g. Australia's LPS 100 family). The detail is for the insurer and the regulator, not for clients; Bob never quotes capital figures and never prices.
Source: RBNZ, Standards and requirements for insurers (https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-insurers/standards-and-requirements-for-insurers) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft
Fit and proper, and the appointed actuary
Beyond capital, IPSA controls who runs an insurer and requires independent actuarial oversight. The fit and proper standard is made under section 36 of IPSA and supports the fit and proper policy required by sections 34 to 35. Its purpose is to ensure an insurer's board members and senior managers have both the competence ("fitness") and the integrity ("properness") to carry out their roles. Insurers must maintain a fit and proper policy and assess relevant individuals against it.
IPSA also requires a licensed insurer to have an appointed actuary, an independent expert who reviews the insurer's financial condition, reserves and solvency and reports on them. RBNZ published a thematic review of the appointed-actuary role and regime in June 2020, signalling it as an area of supervisory focus. Some overseas insurers can apply for a non-resident appointed actuary who is not a fellow of the New Zealand Society of Actuaries.
For Bob: these are internal-governance controls on the insurer, not consumer-facing rules. They matter as background assurance that licensed insurers are run by vetted people and checked by an independent actuary.
Source: RBNZ, Fit and proper standard (https://www.rbnz.govt.nz/regulation-and-supervision/insurers/regulation/fit-and-proper-standard) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft
Financial strength ratings
IPSA uses public credit-style ratings as a market-discipline tool. Under section 60 of IPSA, some licensed insurers must hold a current financial strength rating from a rating agency approved by RBNZ, and must disclose that rating. RBNZ has approved three rating agencies for this purpose: A.M. Best, Standard & Poor's (S&P), and Fitch Ratings. The rating is a third-party opinion on the insurer's ability to meet its obligations, intended to help the market (and consumers) gauge financial strength.
For Bob: a financial strength rating is a publicly available, plain signal of an insurer's prudential standing, and it can be referenced as information (for example, noting that NZ insurers of a certain size carry a published rating). Bob should not interpret a specific rating as advice to choose one insurer over another without licensed-adviser involvement, and any specific rating value should be checked at time of use rather than recalled. [VERIFY] the current rating of any named insurer before stating it.
Source: RBNZ, Financial strength-rating agencies for insurers (https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-insurers/resources-for-insurers/financial-strength-rating-agencies-for-insurers) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft
How RBNZ supervises and intervenes
Licensing is the start; supervision is the ongoing job. RBNZ monitors licensed insurers' compliance with their conditions and prudential requirements, builds an understanding of each insurer's business model, strategy, governance and risks, and assigns a designated supervisor to insurers that need more intensive oversight so prudential issues can be spotted and resolved early. Supervision is informed by insurer reporting and by the appointed actuary's work.
IPSA also gives RBNZ powers to act when an insurer is in financial distress or non-compliant. These range up to statutory management, a process for complex insolvency in which a statutory manager is appointed to deal with an entity in distress and preserve value for stakeholders. RBNZ has said the distress-management provisions are dated, and modernising its crisis-management powers is one of the explicit aims of the current IPSA review (next section).
For Bob: this supervisory backstop is why a licensed NZ insurer is not left unwatched between renewals. It is background assurance, not a consumer-facing process Bob's users interact with.
Source: RBNZ, How we supervise insurers (https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-insurers/how-we-regulate-and-supervise-insurers/how-we-supervise-insurers) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft
The IPSA review and Amendment Bill (in progress)
IPSA is being modernised. RBNZ has run a multi-stage review of the Act, and in 2025 Cabinet agreed a package of recommendations to update the prudential framework for insurers (RBNZ has described Cabinet agreeing in August 2025 to progress an Amendment Bill). The stated aims are to bring NZ insurance regulation closer to international practice and to other domestic regulatory regimes, to move toward a clearer, more rules-based approach, and to embed modernised supervisory, enforcement and crisis-management (distress) frameworks.
On timing, RBNZ opened consultation on an exposure draft of an Insurance (Prudential Supervision) Amendment Bill in 2026, with submissions due 7 July 2026. RBNZ has indicated that, after considering submissions, it would recommend the Minister of Finance seek Cabinet approval to introduce the Bill into Parliament in 2027. None of this is enacted yet.
For Bob: treat the reformed regime as forthcoming, not current law. Until the Bill passes, the operative rules are IPSA 2010 as amended to date. [VERIFIED-AI 2026-06-21: status as at this date: the IPSA 2010 amendment is at pre-introduction exposure-draft consultation, NOT yet introduced to Parliament, not at select committee, not passed. Cabinet agreed to progress an Amendment Bill in August 2025; RBNZ opened consultation on the draft Amendment Bill in April 2026 (closing 7 July 2026); Cabinet approval to introduce is targeted after the 2026 election, with substantive provisions targeted to commence around 2028. So the reformed regime remains forthcoming, not current law. Source: rbnz.govt.nz, review of the Insurance (Prudential Supervision) Act 2010.] [VERIFY] the specific final contents and commencement of the Amendment Bill once introduced, before stating anything about the new regime as settled, and keep such statements as drives: information.
Source: RBNZ, Review of the Insurance (Prudential Supervision) Act 2010 (https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-insurers/how-we-regulate-and-supervise-insurers/our-policy-work-for-insurer-oversight/review-of-insurance-prudential-supervision-act-2010) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft
CoFI: the conduct regime for financial institutions
Conduct is regulated separately from prudential soundness. The Financial Markets (Conduct of Institutions) Amendment Act 2022 (the CoFI Act) amended the Financial Markets Conduct Act 2013 to create a new framework for regulating the conduct of financial institutions toward consumers. CoFI captures registered banks, licensed insurers, and licensed non-bank deposit takers (NBDTs) such as credit unions, that is, the major product-providers, when they provide relevant services to consumers.
Under CoFI these institutions must hold a conduct licence (a financial institution licence) from the FMA and must comply with the fair conduct principle: to treat consumers fairly. The regime is the rough NZ analogue of the consumer-conduct obligations that sit on the conduct side of Australia's twin-peaks model. CoFI focuses on the product provider's own conduct system, not on individual advice (advice is the separate FAP regime, below).
For Bob: any NZ insurer Bob works with that deals with consumers is a CoFI-licensed financial institution with a fair conduct obligation. That is part of the consumer-protection backdrop to Bob's product.
Source: FMA, Conduct of Financial Institutions (CoFI) legislation (https://www.fma.govt.nz/business/legislation/conduct-of-financial-institutions-cofi-legislation/) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft
The fair conduct principle and the fair conduct programme
CoFI's core obligation has two linked parts. The first is the fair conduct principle: a financial institution must treat consumers fairly. The second is the mechanism that operationalises it: every covered financial institution must establish, implement and maintain an effective fair conduct programme (FCP). An FCP is the set of policies, processes, systems and controls designed to ensure the institution complies with the fair conduct principle. The FCP must be in writing and meet the minimum requirements set out in the CoFI Act.
Crucially, the FCP must account for intermediated distribution, that is, situations where an intermediary or agent (for example, an adviser, a broker, or even a car dealer arranging finance or insurance) is involved in distributing the institution's products. The policy intention is a shared responsibility between the financial institution and any FAP-licensed intermediaries for fair treatment and good outcomes for consumers.
For Bob: if Bob (via the licensed FAP it operates under) ever distributes a CoFI institution's product, both the institution's FCP and the FAP's own advice obligations apply, and the two are meant to interlock. [VERIFY] the precise contractual/oversight arrangement between the Bob FAP and any product provider before relying on how the shared-responsibility duty is allocated in a given case.
Source: FMA, Fair Conduct Programme (https://www.fma.govt.nz/business/services/financial-institutions/fair-conduct-programme/) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: advice · status: draft
CoFI key dates: licensing from 2023, in force from 31 March 2025
CoFI was phased in. The FMA began accepting conduct-licence applications from 25 July 2023, giving institutions a window to apply and build their fair conduct programmes ahead of commencement. The regime then came into full effect on 31 March 2025: from that date, covered financial institutions must hold an FMA conduct licence and operate a fair conduct programme to keep providing relevant services to consumers. Around 100 institutions (banks, licensed insurers and NBDTs) were in scope to be licensed.
The brief mentions an "around March 2025" commencement; the specific date is 31 March 2025, the commencement date on which the CoFI conduct provisions (inserted into the Financial Markets Conduct Act 2013 by the 2022 Amendment Act) took effect. The 25 July 2023 application-open date and the 31 March 2025 in-force date are the two anchors to remember.
For Bob: when describing the NZ regime, state CoFI as in force since 31 March 2025. [VERIFY] any claim that a specific insurer holds a current conduct licence, as licensed status is checkable on FMA records and should not be assumed.
Source: FMA, CoFI licensing begins (https://www.fma.govt.nz/news/all-releases/media-releases/cofi-licensing-begins/) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft
CoFI conduct licence vs FAP advice licence (two different licences)
A common confusion is treating CoFI and the financial-advice regime as one thing. They are two different FMA licences with different scope, and a single business can need both.
- CoFI conduct licence (financial institution licence): held by the product provider (bank, licensed insurer, NBDT). Its scope is the institution's conduct toward consumers across its business, delivered through the fair conduct principle and a fair conduct programme. It is not about giving advice.
- FAP licence (Financial Advice Provider): held by, or operated under by, anyone who gives regulated financial advice to retail clients. Its scope is the act of advising (recommendations and opinions about products), governed by the FMC Act advice duties and the Code of Professional Conduct. FAP licences come in classes (broadly: sole adviser, multi-adviser business, and large organisations using nominated representatives).
The two regimes are complementary, with broadly consistent objectives, and they are designed to create a shared responsibility between institutions and FAP-licensed intermediaries for fair consumer outcomes. An insurer that both manufactures products and gives advice could hold a CoFI conduct licence and a FAP licence at the same time.
For Bob: Bob's own regulatory home is the FAP/advice side (covered in regulatory-conduct.md), because Bob is about advice and information to retail clients. CoFI is the provider-conduct side that sits on the insurers behind the products. Keep the two licences distinct when explaining the regime. [VERIFY] exactly which licences the Bob entity and its product partners hold before relying on this in production.
Source: FMA, Financial Advice Provider (FAP) (https://www.fma.govt.nz/business/services/financial-advice-provider/) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: advice · status: draft
The FMA as conduct regulator (and how it differs from RBNZ)
The Financial Markets Authority (FMA) is New Zealand's conduct and markets regulator. Across financial services it handles licensing of conduct and of financial advice, disclosure, market integrity and consumer protection. For the two regimes in this file, the FMA is the body that issues and supervises CoFI conduct licences and that issues and supervises FAP financial-advice licences, and it enforces the fair conduct principle and the advice duties.
This is the clean dividing line to remember: RBNZ = prudential (is the insurer financially sound enough to pay claims, under IPSA), FMA = conduct (does the institution treat consumers fairly under CoFI, and is advice given properly under the FAP regime). An insurer therefore answers to both regulators at once, for different things, which parallels Australia's APRA-and-ASIC split. There are some overlapping or coordinated areas between regulators, so the boundary is not always perfectly clean. [VERIFY] any specific point about which regulator leads on a given matter.
For Bob: when a client asks "who watches the insurer?", the accurate answer is two regulators, RBNZ for financial soundness and the FMA for fair conduct (and the FMA again for the advice Bob's licensed FAP gives). This is drives: information background, not advice.
Source: FMA, CoFI regime now in effect (https://www.fma.govt.nz/news/all-releases/media-releases/cofi-regime-in-effect/) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft