AMI package sparks call for industry regulation
The Greens are calling for greater regulation in the insurance industry following the Government's AMI Insurance bailout announcement last week.
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The Greens are calling for greater regulation in the insurance industry following the Government's AMI Insurance bailout announcement last week.
Finance Minister Bill English announced a support package of up to $500 million for the Christchurch-based insurer on Thursday, after concerns were raised it might not be able to cover claims from February's earthquake.
Mr English said the "back-up" package would offer reassurance to the company's 485,000 policyholders.
Green Party co-leader Russel Norman said today the package highlighted the need for stricter solvency standards in the industry, and that more regulation was needed.
"New Zealand taxpayers are now paying the high cost of low quality, light-weight regulation," Dr Norman said.
"We've seen the same story in the building sector with the leaky home disaster. We've seen the same story in the finance sector, with the collapse of South Canterbury Finance. And we're seeing it again in the insurance sector, with the rescue of AMI."
Dr Norman said the Reserve Bank was currently reviewing solvency standards, and it needed to take a more hands-on role in regulating the industry.
"The Reserve Bank should also investigate the risk profiles of insurers operating in New Zealand to ensure they're not exposing themselves unduly, as AMI did with its over-exposure to a natural disaster in one city -- Christchurch," Dr Norman said.
"Our economy will continue to be hit by one economic shock after another until we regulate it smartly."
NZPA
Tue, 12 Apr 2011
Tue, 12 Apr 2011
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AMI package sparks call for industry regulation
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