The Reserve Bank of New Zealand (RBNZ) has issued new guidelines for the use of certain words covering the insurance sector.
The following words have been brought under the ‘Restricted Category’ with its usage defined for specific purposes and persons.
The words are (a) insurance (b) assurance (c) underwriter (d) reinsurance and (e) any similar term or word with a similar meaning to the above.
Quoting the Insurance (Prudential Supervision) Act 2010, RBNZ said that Section 220 explained which persons, other than a licensed insurer, can use these words in their name. These are persons carrying on their activity in New Zealand, including insurance loss assessors and loss adjustors, insurance brokers and intermediaries and non-profit industry associations that perform one or more of the functions listed.
“Among the examples of entities and activities that would be prohibited from using these restricted words are (a) An internet-based insurer wanting to incorporate in New Zealand with no New Zealand policyholders or intention to market to New Zealanders (b) A person that is not involved in insurance activity, either as an insurer or as a person described in section 220(3) and (c) A captive insurer that is incorporated in New Zealand and which insures offshore risks,” a Bank statement said.
Persons other than a licensed insurer carrying on business in New Zealand, that are prohibited from using one of the restricted words but who want to use one of these words and who have a legitimate reason for doing so and are not carrying on insurance business in New Zealand, may apply to the Reserve Bank for an exemption from section 220 of the Act.