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- Release Date: 06/08/13 18:53
- Summary: GENERAL: TWR: TOWER receives clarity around licensing conditions
- Price Sensitive: No
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TWR
06/08/2013 16:53
GENERAL
REL: 1653 HRS Tower Limited
GENERAL: TWR: TOWER receives clarity around licensing conditions
6 August 2013
Market Information
NZX Limited
Level 2, NZX Centre
11 Cable Street
Wellington
NEW ZEALAND
Company Announcements Office
Australian Stock Exchange Limited
Exchange Centre
Level 6, 20 Bridge Street
Sydney NSW 2000
AUSTRALIA
TOWER receives clarity around licensing conditions
Further to the disclosure notice of 17 July, TOWER Limited advises that it
has successfully concluded discussions with the Reserve Bank of New Zealand
(RBNZ) in relation to its licensing conditions.
The RBNZ today advised that in light of Canterbury earthquake events and
consistent with its treatment of other insurers, under the Insurance
(Prudential Supervision) Act 2010 it now requires a minimum solvency margin
of $80 million above minimum solvency capital to be applied to TOWER
Insurance Limited's (TIL) Provisional Licence, and carried over to its full
licence when issued. This will come into effect on 16 August 2013.
TOWER Chief Executive Officer, David Hancock said that this move is
consistent with the TOWER board's existing strategy for the group to be
strongly capitalised.
"TOWER has always ensured it is strongly capitalised, above minimum solvency
requirements. We continue to make solid progress settling claims relating to
the Canterbury earthquakes. TOWER has now settled more than 69 per cent of
claims (by number) and well above the industry average rate of settlement (by
value).
"With the sale of most of our Life insurance business to Fidelity Life
Assurance Company Limited having settled on 1 August, funds are readily
available to meet this new minimum solvency margin. We are now reassessing
our capital requirements as a focused General Insurer. In light of these new
requirements, our previously signaled capital management plan will be
reviewed as part of a prudent capital management strategy.
"As soon as we have determined our capital management approach, we will
update the market," Mr Hancock said.
TOWER Life New Zealand Limited (TLNZ) will also hold a minimum solvency
margin, of $15 million, relating to the retained portion of the life
business. Divestment opportunities are actively being sought for this
business in run off, and interest has been expressed by more than one party.
ENDS
David Hancock
Chief Executive Officer
TOWER Limited
ARBN 088 481 234 Incorporated in New Zealand
For further information, contact
Tracey Palmer
Head of Corporate Communications
DDI +64 9 369 2017
End CA:00239344 For:TWR Type:GENERAL Time:2013-08-06 16:53:32
