NZ Insurance Supervisors use SIF Resources to hone in on Climate Risks
Author: Reserve Bank of New Zealand (RBNZ)
Tags: New Zealand, Question Bank, Reserve Bank of New Zealand (RBNZ)
The Sustainable Insurance Forum (SIF) proved to be a useful resource for New Zealand’s insurance supervisors who honed in on climate risks through specialist training sessions in September.
The climate risks supervisor training was a joint effort by the Reserve Bank of New Zealand (RBNZ) and the Financial Markets Authority (FMA) through the Council of Financial Regulators to upskill RBNZ’s frontline supervisors on what risks prudentially regulated entities (like banks and insurers) could face as a result of climate change.
The RBNZ drew on the SIF’s Question Bank and the Task Force on Climate-related Financial Disclosures (TCFD) survey to help inform the training.
The training, which was compulsory for all RBNZ’s insurance and banking supervisors, was aimed at exploring how climate risks could affect New Zealand’s regulatory framework and financial stability. It was the first of a planned package of training for supervisors and their colleagues in financial stability.
Stan Christian, RBNZ Supervision Manager, who led the training, said, “Climate needs to be at the top of our agendas. It’s not enough for our regulated entities to say they are aware of climate change, mitigation plans need to be on the agenda for future meetings with these firms and we need to see evidence of progress against these plans.”
RBNZ Climate Adviser Susan Livengood said the shared learning approach and the cross-agency approach – which included input from the FMA and lots of discussion – gave participants a big picture view.
“It was definitely a two-way learning process. We had some very useful discussions that will help inform the development of the Bank’s climate strategy. It was also a chance to consider what changes might come from the Government’s proposal to implement compulsory climate related financial reporting, using the reporting framework from the Taskforce for Climate-Related Financial Disclosures (TCFD).
“Having access to the SIF resources meant we were able to draw on global best practice to inform our supervisor training. The next training session will include a presentation from new prudential supervision guidance recommended by the global central banks’ and supervisors’ Network for Greening the Financial System.
Sanja Sesto, Principal Adviser for Disclosure at the FMA said, “These sessions support cross-agency collaboration, skills and knowledge sharing as well as understanding the different perspectives of the different regulators”.
The Reserve Bank of New Zealand has been a member of SIF since December 2018. Geoff Summerhayes, outgoing SIF Chair and APRA Executive Board Member, has highlighted that “The power of the SIF network is the collaboration of regulators and supervisors to accelerate understanding, build knowledge and embed into supervisory practices. RBNZ is one of our over 30 members globally and a great example of the power of the SIF network”.