New York Gov. David A. Paterson (D) recently signed legislation that will enable insurance companies to deposit funds in credit unions.
Nonlife insurance companies are now able to invest up to $250,000 in share certificates with credit unions where they are eligible for membership. The legislation was sponsored by Senate Insurance Committee Chair Neil Breslin and Assembly Insurance Committee Chair Joseph Morelle and was unanimously supported in both chambers. The new law reverses a ruling of the New York State Insurance Department that prohibited insurance companies from investing in credit union share certificates.
"I applaud the legislature and the governor for endorsing this measure and in so doing, recognizing that leveling the playing field for credit unions helps all consumers," said William J. Mellin, president/CEO of the Credit Union Association of New York. "By giving insurance companies the ability to invest in both bank and credit union certificates, consumers will benefit from a more cost effective marketplace."
According to New York Insurance Association President Ellen Melchionni, the move demonstrates how easing regulatory limitations can benefit small businesses by enabling insurance companies across New York State to have greater choice with their investments.