Deposit guarantee companies test NZ market

A home-grown company, Deposit Bond, has been operating since April last year and its business is secured by the "AAA" rated Great Lakes Reinsurance in Britain which is ultimately owned by Munich Reinsurance. Now another, Deposit Power, which is ultimately owned by the recently listed Promina has opened for business in New Zealand after first establishing a business in Australia where it has operated since 1989.

Essentially, they offer potential residential property buyers the option of paying a relatively small fee to have their deposits guaranteed, rather than having to pay it in cash, until settlement date.

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