Insurance companies now able to do business with credit unions
Albany, N.Y., Sept. 1, 2010—Governor Paterson signed legislation on Aug. 30 that will enable insurance companies to deposit funds in credit unions. Property and casualty insurance companies as well as certain other insurance companies are now able to invest up to $250,000 in share certificates with credit unions where they are eligible for membership through this legislation which was signed into law as Chapter 461.
The legislation (S3499A/A8557A) was sponsored by Senate Insurance Committee Chair Neil Breslin and Assembly Insurance Committee Chair Joseph Morelle and was unanimously supported in both chambers. This new law reverses the legal finding of the New York State Insurance Department that prohibited insurance companies from investing in credit union share certificates.
“I applaud the legislature and the Governor for endorsing this measure and in so doing, recognizing that leveling the playing field for credit unions helps all consumers,” said William J. Mellin, president and CEO of the Credit Union Association of New York. “By giving insurance companies the ability to invest in both bank and credit union certificates, consumers will benefit from a more cost effective marketplace.”
“This new law enables insurance companies across New York State to have greater choice with their investments,” Ellen Melchionni, president of the New York Insurance Association said. “This is a perfect example of how easing regulatory limitations can benefit small businesses.”
“I am able to better diversify Community Mutual’s investment portfolio and maximize return on investment now that my company has the ability to deposit funds in credit unions,” Thomas White, president of Community Mutual Insurance Company said. “I advocated for this change so my company can have as many options as possible when determining how to best invest our policyholders’ money. It makes particular sense for credit unions and mutual insurance companies to be allowed to partner since both are driven by the individuals the organization serves.
“Now more than ever, local businesses need safe, cost effective financial institutions to maximize their income,” said Paula Stopera, president/CEO of Capital Communications Federal Credit Union. “Signing this legislation into law removes an unnecessary barrier to our services, leaving credit unions better equipped to meet the financial needs of their local business community.”
“During this time of economic uncertainty we must foster an environment that will allow businesses to grow,” Sen. Breslin said. “This legislation continues that effort by affording upstate businesses the opportunity to invest in a wider range of products, specifically credit share certificates only offered through credit unions. The more safe investment options a business has, the more the likelihood that they will be able to expand and hire new employees.”
“Credit unions have provided security and high-quality banking services for millions of New Yorkers,” Assemblyman Morelle said. “Allowing non-life insurance companies to invest in them strengthens credit unions, their members and policyholders alike.”
The Credit Union Association of New York has served as the trade association for the state’s credit unions for 93 years. New York credit unions have assets of more than $50 billion and 4.4 million members. To learn more about the Association, visit www.cuany.org.
The New York Insurance Association (NYIA®) is a state trade association that has represented the property and casualty insurance industry for more than 125 years. For more information on NYIA, visit www.nyia.org.