Credit Union Journal Daily Briefing | Thursday, January 7, 2010
DUBLIN, Ohio – An article reported online by Credit Union Journal Jan. 6 incorrectly stated that NCUA and American Share Insurance are in negotiations regarding ASI’s primary deposit insurance program. Both NCUA and ASI commented yesterday that no such formal talks have taken place or are scheduled.
In a statement released by ASI, Dennis Adams, president said, "No such statement or reporting has been made or rendered by ASI in any form and there are no such negotiations going on between ASI and the NCUA. ASI is financially sound, with fully funded reserves, and is anticipating a year-end equity ratio in excess of 1.30% of primary insured shares. Statements of this nature can undermine an otherwise healthy program, raising concerns where concerns don’t exist."
ASI provides primary deposit insurance to more than 150 state-chartered credit unions in nine states. The article reported that Velocity CU, Austin, Texas, is switching from NCUSIF insurance to private insurance provided by ASI.
The private insurer has come under stress in recent months due to losses among several of its large Nevada credit unions, reporting before year-end that it is working to infuse cash into Silver State Schools CU, the state’s largest credit union. The losses forced ASI to charge its credit unions a premium of 15 basis points at year end.
ASI is the last survivor of a one-time network of more than 20 private deposit insurers. The others were wound down and their credit unions converted to federal coverage under the NCUSIF by NCUA after the 1991 failure of Rhode Island Share and Deposit Indemnity Corp., better known as RISDIC.