New Zealand’s government-owned Accident Compensation Corporation has been given an A+ rating by AM Best for maintaining superior capital adequacy ratios.

Despite a reserve shortfall of $NZ3.9 billion in long-tail actuarial liabilities, ACC was praised by AM Best for holding sufficient operating cash and capital to meet all its liabilities, thanks to a sound statutory regulatory regime.

ACC was established to provide 24-hour injury cover for all NZ residents and visitors, with caps on compensation awards keeping the system manageable.

The A+ (superior) rating takes into consideration ACC’s strong commitment to revert to a fully funded basis of estimating current and past liabilities for all of its accounts, AM Best said in a statement.  The $3.9 billion long tail actuarial liability is required by statute to become fully reserved by June 30, 2014.