Credit Union gets tick on insurance licence
Minnow insurer Credit Union Insurance has joined a handful of insurers in gaining a full insurance licence required under new legislation targeted at shoring up public confidence in the industry.
All insurers must be fully licensed through the Reserve Bank by September 7 under the new licensing regime in order to continue offering insurance services and products in New Zealand.
The licence is required under the Insurance (Prudential supervision) Act 2010, which aims to promote "the maintenance of a sound and efficient insurance sector" and promote public confidence in the sector.
The act also imposed "prudential requirements" on the industry and empowered the Reserve Bank to supervise compliance and act against insurers in financial distress.
Credit Union Insurance is owned by the New Zealand Association of Credit Unions (NZACU).
It has 23 member credit unions and mutual building societies with more than 95 branches in New Zealand servicing more than 200,000 individual "members", or customers, with assets valued at about $2.5 billion.
The insurer offers a range of insurance products including funeral plans, vehicle insurance and loan-repayment insurance.
NZACU chief executive officer Henry Lynch said the licensing process was thorough and robust, and would provide consumers and the market with confidence.
Only seven insurers out of more than 100 applicants are fully licensed along with Credit Union Insurance.
AIG is fully licensed as is AMI Insurance and Warren Buffet's Berkshire Hathaway International Insurance. The other four fully licensed insurers are not household brands in New Zealand.
Tower, AMP, Vero, Pinnacle Life and Southern Cross are among those yet to gain full licences.