NCUA: Credit Unions May Invest in Insurance Agencies as CUSOs
June 29, 2011
June 30, 2011
The NCUA recently stated in a legal opinion letter that federal credit unions may purchase or invest in an insurance agency as a credit union service organization (CUSO), provided the insurance agency primarily serves credit unions, their members, or the membership of credit unions that are under contract with the agency. The insurance agency also could engage only in activities “related to the routine daily operations of credit unions.”
The agency added that credit unions must assess the number of credit union affiliated members that the insurance agency serves and the amount of revenues that the agency derives from credit union members. The number of insurance policies that have been sold to members, and the general accessibility of services for credit union members must also be determined before a credit union can invest, according to the NCUA.
Credit unions “must vigilantly reassess” these customer base requirements “on a constant basis,” the NCUA added.
NCUA said that credit unions “have the authority to invest up to 1 percent of their paid-in and unimpaired capital and surplus in CUSOs structured as a corporation, limited liability company, or limited partnership.”
Questions? Contact the Compliance Hotline: 1.800.546.4465, email@example.com.
Posted in NCUA.