An insurance company that provides cover for the majority of local bodies has had its credit rating downgraded.
Civic Assurance provided material damages cover for 46 of the country's 78 councils until the end of June, when reinsurers stung by the Canterbury quakes refused to renew their financial backing.
Credit rating agency A M Best has downgraded Civic's rating from A to BBB+ and has given it a negative outlook.
Civic Assurance chief executive Tim Sole says the downgrade is no surprise because its capital has halved to $10 million.
He says the other reason for the downgrade is that no profit is being generated because no new property insurance is being written.
