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Tower's licensing talks with RBNZ may push up minimum solvency requirements

Wednesday 17th July 2013

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Tower, which has hived off its health insurance and investment units, is in talks with the Reserve Bank over proposed conditions as part of its licence and may have to lift its minimum solvency requirements.

The Auckland-based insurer has a provisional licence under relatively new prudential supervision laws and is in talks with the regulator as part of the licensing process, it said in a statement. Among proposed conditions include "an increase to minimum solvency margin," it said.

In its first-half report, Tower said it will have more than $127 million in capital above minimum solvency requirements after repaying its bonds and making a capital return. As at Sept. 30 last year, Tower Insurance had a solvency margin of $39 million, according the company's annual report.

The shares fell 0.5 percent to $1.99.

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