New Zealand-based CBL Corporation is seeking access to the world’s largest insurance market by acquiring New York insurer Affirmative Direct for $US5.7 million ($7.45 million).

As reported in a Breaking News bulletin last week, the acquisition would give credit and financial risk insurer CBL a US vehicle with valuable licences, allowing it to write niche business within its core expertise.

MD Peter Harris says CBL has established business links in the US and expects to start writing business before the end of the year.

“The opportunity to gain direct access to this market in a low-risk, controlled and manageable way when we are ready is one we don’t want to pass up,” he said.

Affirmative wrote non-life insurance from 1987 and began running off its business in 2007.

It has no outstanding claims or run-off insurance, but holds cash and cash investments, regulatory capital and insurance licences in 14 US states.

Affirmative’s capital is enough to write business for several years without the need for additional capital from CBL. The company announced in October that it was seeking to raise up to $NZ63 million ($58.2 million) to finance its expansion plans.

Affirmative will be sold with no employees or employee liabilities. However, CBL will appoint US-resident independent directors.

CBL, which bought Sydney-based Assetinsure in 2015, will also provide initial product capacity, underwriting and claims management expertise, along with the managing general agents appointed to write Affirmative’s business.

Once the business is large enough, CBL expects to build a US-based management structure.

CBL is funding the acquisition through cash resources. The deal is subject to approval from the New York Department of Financial Services, which can take up to four months.

After regulatory approval, a name change is proposed to align with the CBL brand.