Vero Insurance New Zealand Limited ("Vero")

Vero has been given an A+ Insurer Financial Strength Rating by Standard and Poor’s. The rating outlook is stable. The rating scale is: AAA Extremely Strong; AA Very Strong; A Strong; BBB Good; BB Marginal; B Weak; CCC Very Weak; CC Extremely Weak; SD Selective Default; D Default; R Regulatory Supervision and NR Not rated. Ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. The rating scale above is in summary form. The full version of this rating scale can be obtained from Standard and Poor’s website.

Allianz Australia Insurance Limited ("Allianz")

Financial strength rating and overseas policyholder preference disclosure notice

Allianz has an AA- insurer financial strength rating given by Standard and Poor's (Australia) Pty Limited. The rating scale is: AAA Extremely Strong; AA Very Strong; A Strong; BBB Good; BB Marginal; B Weak; CCC Very Weak; CC Extremely Weak; SD or D Selective Default or Default; R Regulatory Action and NR Not rated. Plus (+) or minus (-): Ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or minus (-) sign to show relative standings within the major rating categories. The rating scale above is in summary form. The full version of this rating scale can be obtained from Standard and Poor's website.

An overseas policyholder preference applies. Under Australian law, if Allianz is wound up, its assets in Australia must be applied to its Australian liabilities before they can be applied to overseas liabilities. To this extent, New Zealand policyholders may not be able to rely on Allianz' Australian assets to satisfy New Zealand liabilities.

OnePath Life (NZ) Limited (“OnePath”)

OnePath has an AA- (Very Strong) current insurer financial strength rating from Standard & Poor’s (Australia) Pty Limited. A summary of Standard and Poor's rating scale is: AAA Extremely Strong; AA Very Strong; A Strong; BBB Good; BB Marginal; B Weak; CCC Very Weak; CC Extremely Weak; SD or D Selective default or default; R Regulatory Action and NR Not rated. Ratings from “AA” to “CCC” may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. The full rating scale is available from Standard and Poor’s at www.standardandpoors.com.

OnePath’s Solvency

Like all licensed insurance companies in New Zealand, OnePath Life (NZ) Limited is required to meet the Solvency Standard set by the Reserve Bank of New Zealand.

What is a Solvency Standard?

A Solvency Standard sets out the minimum amount of capital an insurance company is required to hold in order to meet its long-term projected liabilities under adverse conditions. These liabilities include insurance claims that the company is expected to pay to its customers in the future.

What is the Solvency Margin?

The Solvency Margin is the amount of capital an insurance company holds that is above the minimum level of capital it is required to hold under the Solvency Standard.

What is OnePath Life (NZ) Limited's Solvency Margin?

The Solvency Margin of OnePath Life (NZ) Limited as at 31 March 2016 is $38.0m. The table below shows how the Solvency Margin is made up:

   Statutory Fund Non-Statutory Fund Total
Actual Solvency
Capital
$422.9m $2.7m $425.6m
Minimum
Solvency Capital
$386.6m $1.0m $387.6m
Solvency Margin $36.3m $1.7m $38.0m
Solvency Ratio 109% 262% 110%

Interpretation

‘Actual Solvency Capital’ is the actual capital held for solvency purposes.
‘Minimum Solvency Capital’ is the capital required to be held by the Reserve Bank of New Zealand for solvency purposes.
The difference between the Actual Solvency Capital and Minimum Solvency Capital is the Solvency Margin.
'Solvency Ratio' is the Actual Solvency Capital divided by the Minimum Solvency Capital, expressed as a percentage.

What does a Solvency Margin mean to me as a customer?

The higher the Solvency Margin, the better equipped an insurance company is to keep meeting its on-going obligations. With its Solvency Margin you can be confident that OnePath Life (NZ) Limited will be there when you need them the most - at claim time.