Quarterly Statement by the Council of Financial Regulators – June 2024

The Council of Financial Regulators Kaunihera Kaiwhakarite Ahumoni (CoFR) held its quarterly meeting on Wednesday 5 June 2024. The meeting was chaired by the Governor of the Reserve Bank of New Zealand Adrian Orr. The Council discussed the current focus of each of the CoFR members and noted the progress being made across each of the five identified priority themes for the financial system.

CoFR discussed in greater detail the work programme in relation to climate related risks. CoFR noted the progress being made on climate related initiatives within each CoFR agency, particularly the actions contained within the Emissions Reduction Plan and National Adaptation Plan that related to the financial sector. The Council reiterated their commitment to coordinate and cooperate on climate related initiatives and to deliver consistent messaging to regulated financial entities. CoFR confirmed their support, where appropriate, to the development of a Climate Adaptation Framework and sustainable finance taxonomy for New Zealand. They also noted the Finance and Expenditure select committee’s inquiry into Climate adaptation was a key focus over the next few months.

Kris Faafoi, CEO of the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa, joined the meeting to discuss the general insurance sector’s priorities, risks, and challenges. The conversation covered three priority areas: 1) insurance affordability; 2) resilience; and 3) the regulatory environment. CoFR noted that these areas were not mutually exclusive, for example decisions made regarding the resilience of the built environment would have an impact on long-term insurance affordability and aggregate regulatory settings would likely have a bearing on the flexibility of the insurance sector in responding to these challenges. CoFR agreed on the importance of continuing to develop a collaborative and constructive dialogue between industry, regulators and policy makers to best respond to these challenges, and noted the CoFR Insurance Forum had already scheduled time later in June to further this dialogue.