This month's Standard & Poor's Performance Index for Australian home loan arrears prime mortgages - covering March 2018 - increased to 1.18 per cent in March, up two basis points from 1.16 per cent in February. Mortgage arrears remained relatively unchanged year on year in March and are lower than the decade-long average for March of 1.31 per cent. "From a structural perspective, we have observed a change in the composition of arrears," S&P stated in a release. "Arrears more than 90 days past due made up around 60 per cent of total arrears in March 2018, up from 34 per cent a decade earlier. There has been a persistent rise in this arrears category, though the level of arrears overall remains low." With the deadline passed for the Australian-owned banks in New Zealand to respond to regulators' demands they prove their conduct and culture are better than that of their parent banks, the heat has now been turned on New Zealand's life insurers. The Financial Markets Authority and the Reserve Bank of New Zealand gave banks until last Friday (18 May) to provide a detailed response on how they are handling the sort of conduct and culture risks seen emerging from the Hayne royal commission. The two regulators are still mulling over their response, but yesterday sent a similar letter of demand to the country's life insurers. It said the "nature and the extent of the issues within financial services in Australia and the obvious cross-over in terms of entities, people and practices into New Zealand demands a strong response from the industry here and from the regulators". Saying they are being supported and encouraged in this action by the Board of the Financial Services Council, the two regulators have given life insurers until 22 June to provide a detailed response of what they have done to assure themselves that "misconduct of the type highlighted in Australia is not taking place here". What happens if the official cash rate drops to zero? As record low interest rates continue, with causes that increasingly appear to be structural in nature, the Reserve Bank of New Zealand has set out five options that the central bank has available to it. In a bulletin article called "Aspects of implementing unconventional monetary policy in New Zealand", RBNZ analysts said the bank needed to be prepared for such a scenario and policy options for responses for policy interest rates plummeting to zero or close to it include: setting a negative OCR; buying up domestic and foreign government bonds; purchasing interest rate swaps to send signals to the markets; and setting up a targeted term lending scheme for banks. "This type of facility would provide collateralised term lending to banks at a subsidised rate if banks met specified lending objectives," ensuring the benefit of the low OCR was passed on to households and businesses", the analysts said.