Financial strength and solvency

Our financial strength rating

Fidelity Life has an A- (Excellent) credit rating from A.M. Best.  The rating has remained unchanged since December 1996.

Fidelity Life has an A- (Excellent) financial strength rating given by A.M. Best.
The rating scale is:  
Secure Vulnerable
A++, A+ (Superior) B, B- (Fair)
A, A- (Excellent) C++, C+ (Marginal)
B++, B+ (Good) C, C- (Weak)
  D (Poor)
  E (Under Regulatory Supervision)
  F (In Liquidation)
  S (Suspended)
For the latest rating, access www.ambest.com. The A.M. Best financial strength rating relates to Fidelity Life's insurance and investment business. This rating should not be read as a recommendation.

Our solvency margin

The solvency margin of Fidelity Life as at 30 June 2016 is $36.1m, made up as follows:

  Statutory Fund ($ M) Non Statutory Fund ($ M) Total Fidelity Life ($ M)
Actual Solvency Capital 166.7 26.4 193.1
Minimum Solvency Capital 152.6 4.4 157.0
Solvency Margin 14.1 22.0 36.1
Solvency Ratio 109% 599% 123%

Note: the 'Minimum Solvency Capital' is the minimum amount of capital required to be held for solvency purposes. 'Actual Solvency Capital' is the amount of capital actually held for those purposes. The difference between the two is the solvency margin. The solvency ratio is the actual solvency capital as a proportion of the minimum solvency capital.

Fidelity Life Statutory Fund No. 1

Section 82 of the Insurance (Prudential Supervision) Act 2010 ("IPSA") requires a life insurer to have at least one statutory fund. A statutory fund is a fund established in the records of a life insurer and relates solely to the life insurance business of the life insurer or a particular part of that business.

The principal obligations of the statutory fund requirements are that:

  1. all amounts received by a life insurer in respect of the business of a fund must be credited to the fund;
  2. all assets and investments related to the business of a fund must be included in the fund;
  3. all liabilities (including policy liabilities) of the life insurer arising out of the conduct of the business of a fund must be treated as liabilities of the fund;
  4. the assets of a fund are only available for expenditure related to the conduct of the business of the fund;
  5. funds may not be restructured or terminated without the approval of the Reserve Bank of New Zealand; and
  6. profits and losses of a fund may only be dealt with in accordance with IPSA sections 112 to 115 and the associated regulations.

Policies that meet the definition of life policy under IPSA sections 84 and 85 must be referred to a statutory fund.