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There are no other feasible options to bring the Insolvency Act 2006 and the Companies Amendment Act 2006 into force or to increase the fees under the Companies Act 1993 Liquidation Regulations 1994. The proposed regulations are therefore the preferred option.

The proposed regulations under the Insolvency Act 2006 would incorporate a range of procedures and information requirements currently prescribed in the Insolvency Regulations 1970 and the Summary Instalment (District Court) Rules 1970, but would incorporate additional measures designed to meet the policy objectives for the proposed regulations. The key features of these regulations include provisions relating to:

• applications, notices and other documents can be filed electronically, and the formatting of applications, notice and other documents will be flexible by specifying the required information for each type of application, notice and document;
• advertising of applications and notices can be made on the Insolvency and Trustee Service website and in the Gazette;
• the content of applications, notices and other documents;
• the process for claims to be made by creditors;
• application by a bankrupt to leave New Zealand;
• application by a bankrupt to carry on business;
• summonsing of persons to be examined by the Assignee, and payment of those persons;
• investing of money by the Assignee;
• meetings of creditors;
• proposals for compositions;
• proposals for approval by the High Court;
• appointment of supervisor under a summary instalment order;
• deduction of supervisor and Assignee remuneration costs from dividends;
• means test for entry into the No Asset Procedure;
• maintenance of, and access to, a public register;
• content of accounts and records; and
• fees payable to an Assignee.

In developing these recommendations, officials have aimed to provide for processes that are as streamlined and will involve the lowest possible compliance costs as possible, consistent with the overall purpose of the Insolvency Act. This has included, where possible, making use of internet-based application processes and standardising the documents used across all the different kinds of insolvency proceedings.

The proposed regulations under the Companies Amendment Act 2006:

• prescribe the terms of deeds of administration; and
• prescribe the form and content of the accounts to be filed under a deed of administration.

These regulations therefore do not extend the regulation of companies, but instead provide for matters already contemplated for by the Companies Amendment Act 2006.

The purpose of prescribing the terms of deeds of administration is to provide a basic set of terms to facilitate the preparation of deeds of administration and that balance the interests of creditors and the company in administration. To provide flexibility, the Companies Amendment Act allows creditors to agree that any or all of these terms do not apply.

The purpose of prescribing the form and content of the accounts to be filed under a deed of administration is to prescribe a standard set of accounts for disclosure on the Companies Register. This will facilitate transparency, making it easier for creditors to monitor companies that are in administration.

The proposed regulations in relation to fees and remuneration would:

• set a fee of $200 (GST inclusive) for a debtor's application for bankruptcy;
• set an upfront fee of $100 (GST inclusive) for applications for summary instalment orders to partly recover the Official Assignee's costs;
• Set the remuneration for the supervisor and the Official Assignee under a summary instalment order at 10% of assets recovered, with 7.5% going to the supervisor and the balance of 2.5% to the Official Assignee;
• provide for the rates of remuneration of Assignees in relation to bankruptcies and when acting as a liquidator, and for other liquidators, as follows:

The fees for applications for bankruptcy and summary instalment orders, and the rates of remuneration relating to summary instalment orders, are aimed at recovering the costs of new processes required to be undertaken by the Official Assignee. The other changes update the current rates of remuneration to reflect costs. A remuneration review has been carried out by the Official Assignee to assess the appropriate level of remuneration for the functions undertaken. The review was based on a time cost analysis of estates administered by the Assignee, and also took into account staff salaries and the cost of overheads, thus allowing for the calculation of the appropriate hourly rates.

While a significant increase in hourly rates is proposed, this is considered justified in order to recover the costs of dealing with bankruptcies and liquidations. The staff involved have expertise in dealing with bankruptcy procedures. The remuneration rates reflect that expertise, and are generally lower than would be charged for similar services provided by the private sector. If the remuneration rates are not increased, more of the costs of dealing with bankruptcies will need to be met from general taxation.

The increased remuneration rates under the regulations for private, court-appointed liquidators should result in fewer applications to Court to fix remuneration at a rate higher than that prescribed in the regulations. This will reduce costs for liquidators, their counsel and the court. These reduced costs will flow through to higher returns for creditors in liquidations.