The governor of the Reserve Bank of New Zealand has warned the wider insurance industry that regulators will be back for them following a damning report into the conduct of life insurers.

Speaking at an industry event, Adrian Orr urged general insurers to have a look at themselves following the central bank's joint report with the Financial Markets Authority into life insurers. The January report found extensive weaknesses in their systems, controls and governance.

"I have no evidence to say it is not the same with general insurers, which have the burden of proof on them now. Please take heed of these results and review your own systems," he said.

"We are going to be coming back and make sure it's not the general insurers too."

Orr told industry delegates to visualise the Brady bunch, saying the sector should be a big family which was "sound and trusted."

Consumer trust was a key theme of addresses both from Orr and finance minister Grant Robertson at the Insurance Council of New Zealand's conference in Auckland today.

Orr said when people showed up for insurable events and found that they couldn't get cover, that insurers would lose social licence with consumers.

"We are saying get smart, be wise, earn your customers but we are also saying you better be explaining very carefully and have the confidence and ability to talk to your customers," he added.

Orr also gave some hints about the regulator's 2020 review which will include an assessment of insurers' solvency positions.

"It is too early to say whether we need solvency standards like the banks or higher," he said, adding that there was unlikely to be a blanket standard; it would depend on the circumstances of different types of insurers.

 

 - NZ Herald