Overseas insurers licensed in New Zealand will benefit from a new class
exemption granted by the Financial Markets Authority.
Relief from NZ GAAP requirement
The Financial Markets Conduct (Overseas Registered Banks and Licensed
Insurers) Exemption Notice 2015 will exempt overseas licensed insurers from the
obligation to prepare entity or group financial statements in accordance with
generally accepted accounting practice in New Zealand.
Instead, overseas licensed insurers must prepare financial statements that
comply with generally accepted accounting practice in their home jurisdiction.
Those financial statements must be prepared within four months after balance
Previously, overseas companies were required to satisfy the Registrar of
Companies that the financial statements complied with accounting practice that
was substantially the same as accounting practice in New Zealand. The new
exemption will remove this uncertainty for overseas licensed insurers.
Overseas licensed insurers must continue to prepare financial statements for
their New Zealand business in accordance with New Zealand generally accepted
Financial statements that are prepared in reliance on the new exemption must
be filed with the New Zealand Registrar of Financial Services Providers within
four months after balance date. Notification that the overseas licensed insurer
is relying on the exemption must be provided at the same time.
In order to rely on the new exemption, a government body for securities
regulation in the overseas licensed insurer’s home jurisdiction must be a full
signatory to the International Organisation of Securities Commissions
Multilateral Memorandum of Understanding Concerning Consultation and
Co-operation and the Exchange of Information. This is to allow the New Zealand
regulatory authority to seek the assistance of the equivalent authority in the
home jurisdiction should enforcement issues arise. Current full signatories
include Australia, the United Kingdom, the United States, Germany, France,
China, Hong Kong, Singapore and Japan.
Relief from NZ auditor
Overseas licensed insurers will also be exempted from the requirement to have
their financial statements audited by a New Zealand licensed auditor or
registered audit firm.
Instead, financial statements must be audited by an auditor that is qualified
to assess whether they comply with the accounting practice in the entity’s home
The new exemption also provides overseas licensed insurers with the option to
have the financial statements for their New Zealand business audited by an
overseas auditor instead of a New Zealand auditor.
The new exemption applies to all accounting periods that commenced on or
after 29 May 2015 and financial statements for the previous accounting
period if they were required to be filed before that date.
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.