The Reserve Bank has described the insurance industry as very sound, despite the announcement of a Government backup financial package for AMI following the Christchurch earthquake.
The Government has provided New Zealand's second largest insurer with a $500 million rescue package - but will not have to pay anything if the company finds a commercial solution to help it pay for Christchurch earthquake claims.
The Reserve Bank became the regulator for the insurance industry last year. A spokesperson says the bank has no concerns about any individual companies in relation to the impact of the February earthquake, and the sector overall is very sound.
Tower group managing director Rob Flannagan says the insurance industry is feeling the pinch, but is in good shape when it comes to meeting claims and honouring contracts.
Late last month, the international insurance rating agency A.M. Best downgraded AMI's financial strength rating from A+ to A-.
It says it is in the process of reviewing all its New Zealand clients after the Canterbury quakes.