Briefs: TSB fined for AML breaches, RBNZ seeks feedback on insurance protection

Locally-owned New Zealand bank TSB Bank Ltd has been fined NZ$3.5 million by the High Court in Wellington for breaches of anti-money laundering legislation. It is the first civil action taken by regulator The Reserve Bank of NZ under the AML/CFT Act. TSB was first formally warned by the RBNZ in 2016 that its AML/CFT programme was non-compliant, but its response has been described as “inadequate and ineffective”. The court ruled that the bank’s failure to respond appropriately to that warning was an aggravating factor.

The Reserve Bank of New Zealand has started a public consultation process into the protection afforded to insurance policyholders, as part of a wider review of the Insurance (Prudential Supervision) Act. It wants feedback on: the amount of capital insurers should be required to maintain; whether New Zealand should set up a guarantee fund in case of insurer failure; whether greater clarity is needed on the rights of consumers when terminating a policy early; how much information insurers should publish so people can assess the company’s financial stability; and whether the protections given to statutory funds should be extended to other types of insurance. Due to the current Covid-19 outbreak in Auckland, the consultation deadline has been pushed out until 15 November.