New Zealand-based Credit Union Insurance’s insurer financial strength rating has been placed on “negative watch” by Fitch.

The insurer – trading as Co-op Insurance NZ – is to be sold to Provident Insurance Corporation pending regulatory approval.

The risk of “weakening business franchise and generation” from its credit union owner – the New Zealand Association of Credit Unions – has contributed to the action, Fitch says.

The rating watch will be resolved when Fitch has sufficient information on the proposed sale.