Business Law Reform Bill

Thank you, Mr Chairman. [Interruption] It is quite a delight to have such splendid support, not only from this side of the Committee but also from the other side, and I thank the members for it. When we look at Part 5 we are talking about the Insurance Companies’ Deposits Act. This is not necessarily an area that I have a great deal of expertise in, but from that point of view it does prevent foreign companies labelling themselves as New Zealand companies. I guess that is quite a significant thing, and it will be continued, no doubt, with other legislation that the Minister will bring about to facilitate the additional opportunity for New Zealand companies to be given true representation.

It comes back, though, to the purpose of commerce and legislation surrounding it. The question I would like to ask the Minister is—and I am sure she will be happy to respond—what, in fact, she sees as the true purpose of a commercial entity in New Zealand. Wealth creation, I have always believed, is what business is about and these regulations, for the sake of regulating, can inhibit a company’s opportunity to create wealth. I was always taught that the purpose of a commercial entity—be it insurance or otherwise—is to increase the wealth of the shareholders of that company. I would like to ask the Minister whether she responds to that and agrees with it. Far be it from me to anticipate the Minister’s response, but I think it is crucial to know so I again ask the Minister what she thinks is the commercial purpose of a limited liability company in New Zealand.

As I said, I am always happy to respond to those who ask intelligent questions; I am going to make an exception to that rule and respond to that member, Chris Auchinvole. I am making the exception because I think there is a genuine misunderstanding, as there was with the captive insurers when they came to make submissions to the select committee about the purpose of this particular provision in the legislation. It is to prevent entities from representing that they are supervised under New Zealand’s insurance regulatory regime when, in fact, they are not even acting as insurance companies in New Zealand, and it is necessary to prevent damage to New Zealand’s reputation internationally. Tragically, we have companies that use the word “insurance” in their name, register in New Zealand, and are not acting as insurers. They are not subject to any regulatory framework in New Zealand at all, but are enabled to operate carte blanche in other jurisdictions, and that has great potential for impact on New Zealand’s reputation.

So this provision is to tidy that up for the captive insurers who made submissions on this. When they are carrying on an insurance business in New Zealand, for the purposes of these Acts, then essentially this bill is not designed to disrupt that process at all. They are able to continue to do that, and this amendment will not apply to them, so no action will be required on their part. There was some misunderstanding about that, which is what I think was the underlying issue that the member wanted me to respond to, and I am happy to do so.

The question was put that the amendment set out on Supplementary Order Paper 72 in the name of the Hon Lianne Dalziel to Part 5 be agreed to.

Amendment agreed to.

Part 5 as amended agreed to.

Schedule

The question was put that the amendment set out on Supplementary Order Paper 72 in the name of the Hon Lianne Dalziel to the schedule be agreed to.

Amendment agreed to.

Schedule as amended agreed to.

Clauses 1 and 2

The CHAIRPERSON (H V Ross Robertson): I call the honourable member Pansy Wong. Ni hao.