Wednesday 1st August 2012
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China Taiping Insurance (NZ), the local unit of the Hong Kong stock exchange-listed insurer, will exit the New Zealand market, effective immediately, citing difficulties obtaining reinsurance.
"All existing policies will remain active until the policy period ends," Richard Sun, general manager, said in a letter to brokers. "The company has reinsurance for existing policies and expects to have sufficient reinsurance until all existing policies expire."
"It may take several years to settle claims and close down the business," Sun said.
The Reserve Bank has notified of Auckland-based Taiping's decision to exit the local market. The company is "currently complying with all the RBNZ requirements."
In May, the insurer told brokers it wouldn't underwrite any new business in Wellington or Canterbury after it was forced to clamp down on its criteria at the behest of reinsurers.
That same month, the Reserve Bank said it expects reinsurance premiums will rise this year as global firms look to recoup the losses incurred from the Canterbury earthquakes, Japanese tsunami, Australian storms and Thailand floods. The bank said a large proportion of general insurers need to renew their reinsurance contracts for a July 1 start date.
The Hong Kong Exchange-listed shares of parent China Taiping Insurance Holdings last traded at HK$11.22. The stock has shed 25 percent so far this year.
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