News Round Up: June 7

Bollard's views on inflation keenly sought; OCR on hold; Smith opens ACC door to private insurers.

Tuesday, June 7th 2011, 7:07AM

Bollard's views on inflation keenly sought; OCR on hold
What Reserve Bank governor Alan Bollard makes of rising inflation expectations will be a key message financial markets are looking for from his next monetary policy statement on Thursday. [Read On]

AFA applicants moving - but slowly
There are now 733 AFAs and it's good to see the recent publicity about incomplete qualifications has resulted in a lot more information being sent through over the last week. [Read Mel's Blog here]

Smith opens ACC door to private insurers
The insurance industry has given a cautious welcome to ACC Minister Nick Smith's proposals to allow employers to buy accident cover from private insurers.

"Our interest is in making the programme available to more employers and enabling a wider range of risk sharing options between ACC and business," said Smith in the forward of the discussion paper on the proposed changes.

"The paper also proposes reforms that would allow employers the choice of other workplace insurers."

Insurance Council chief executive Chris Ryan said, "This is a relatively small offering, an evolutionary process."

He said the insurance industry could access a pool of capital to write such workplace insurance cover though reinsurance costs have surged in the wake of a number of natural disasters.

The Government said any ACC reforms would come after this year's elections.

"A mix of public and private provision of accident compensation is the most common model amongst developed countries. Choice will put continuous pressure on ACC to be customer-focused, innovative and efficient," Smith said.

The discussion paper outlines ways in which ACC could be opened to "competitive pressure" from private sector insurers, and among the proposals is a requirement for insurers to "be required to provide at least the minimum level of cover currently set out in the Accident Compensation Act 2001."

Participating insurance companies would also "be subject to prudential regulation that reflects the particular requirements of work-related personal injury insurance."

In the event of an insurer becoming insolvent, ACC would take over claims management and costs "would be met by a laevy on all insurers."

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