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The Reserve Bank has an odd mandate.\xa0

On one hand they directly involved themselves in cocking up the economy to the extent it has been by throwing printed money about the place, often with no real guidelines to banks as to where it would end up. Small clue: it went into housing.\xa0

But the on the other hand they are all over us in terms of rules around what we can and can't do with income to debt ratios, how much money a bank has to hold in reserve for troubled times, etc.\xa0

The latest is the directive to banks about insurance cover on the places they lend money on, i.e. when we get a mortgage, we need cover and they now expect the banks to be even more vigilant about the sort of cover, how much for and how long it will last.\xa0

It's all in their Financial Stability Report.\xa0

But on the insurance issue they revert to their hands off approach, where they point out that they are seeing more people having trouble getting and paying for insurance and that this will be a growing issue.\xa0

Thanks for the warning. Have you got any advice?\xa0

Well, they have, sort of. They recommend insurers, Governments and home buyers, as well as lenders, should take action to improve our understanding of natural hazards and to proactively manage affordability challenges.\xa0

Awesome. Thanks for that.\xa0

This in some respects is the issue of our time. Like it or not insurance, if it hasn\u2019t already, will become a burden, if not a nightmare.\xa0

The Government has already moved on the earthquake rules around buildings, knowing full well the current deadlines are unrealistic.\xa0

But the day is coming, if it isn't already here, where people cannot afford to be where they are or want to be, or even if they have money, can't find a backer.\xa0

So, the big question the Reserve Bank doesn\u2019t answer is - then what?\xa0

If you can't get insurance, you can't get a mortgage. Maybe you can't get a mortgage because you can't afford insurance to the level they now expect.\xa0

You are stuck in a place that was once safe and now isn't. What do you do?\xa0

This all has enormous economic and social consequences. So, who is in charge of this and what is the plan?\xa0

Telling us it's an issue in a stability report isn't really a solution and that\u2019s probably the way they like it.\xa0

It's always easier to point a problem out than to actually deal to it.\xa0

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