DUBLIN, Ohio – Private credit union insurer ASI, battered by losses among its Nevada credit unions, announced a 15 basis points special premium assessment for 2010, its second in a row.
The premium will be assessed on all primary insured credit unions of record on Sept. 30 and based on the total shares reported as of June 30.
In addition to the premium, ASI announced a change in its deposit requirement effective Dec. 31: from of a tiered rate of 1.0% to 1.3% based on CAMEL rating, to a flat 1.3% rate for all primary insured member credit unions.
“Lower yields on our high-quality government bond portfolio and a hesitant economic recovery have strained our earnings, while weaknesses in a small number of member credit unions have required a more aggressive posture when funding our loss reserves,” Dennis Adams, president of ASI, said. “The move to increase the fund’s equity ratio through the increased deposit rate will enhance equity sufficiency and satisfy regulatory requirements at the least cost to our members.”
Last year’s special assessment, the first in the company’s history, raised $15.2 million and helped replenish reserves drained by big losses at Cumorah FCU, a Las Vegas credit union that failed last year, and by a $22 million capital infusion to Silver State Schools CU, Nevada’s largest credit union.
The premium and deposit rate change have no effect on ASI or Excess Share Insurance Corporation excess insurance policyholders.
