Solvency Margin
Solvency - what it means and why it's important
As a licensed insurance company in New Zealand, NZDIS is required to meet the Solvency Standard for life insurance business set by the Reserve Bank of New Zealand.
Solvency Standard
The Solvency Standard sets out the amount of capital a life insurance company is required to hold to meet its long-term liabilities under adverse conditions. These liabilities include insurance claims that the company is expected to pay to its customers.
NZDIS's Solvency Margin
The NZ Dental Insurance Society Ltd (NZDIS) is a licenced insurer under the Insurance (Prudential Supervision) Act 2010. From December 2012 the Company was required to maintain a solvency margin of $0. As at 31 December 2023 the solvency margin was:
| Dec 2023 | |
| Actual solvency capital | $748,162 |
| Minimum solvency capital | $271,114 |
| Solvency margin | $477,048 |
| Solvency coverage ratio | 276% |
The basis for determining solvency capital has changed under the Interim Solvency Standard, taking account of the economic value of the business. Solvency capital increases because of this, and the requirement increases by the same amount.
Financial Strength Rating
Under the Insurance (Prudential Supervision) Act 2010 NZ Dental Insurance Society Ltd is not required to have a current financial strength rating as it is exempted as a small insurer.