First Credit Union, New Zealand's biggest credit union, says its insurance company is now able to act as a full life insurer and take on business from other New Zealand credit unions.

The credit union says the Reserve Bank of New Zealand has confirmed that the insurance licence of First Insurance has been modified allowing it to become a full life insurer, according to a report in interest.co.nz.

First Insurance is a wholly owned subsidiary of First Credit Union, and will be underwriting both the loan protection and the funeral insurance offered to its nearly 60,000 members.

First Credit Union says having used external insurers for almost 20 years, the opportunity to maintain income within the credit union and deal more quickly with, and be closer to members, is very important.

"The licence modification also means that First Insurance is not limited to providing insurance to our own members so we will be looking for further opportunities in the wider community of NZ-based credit unions."

First Insurance was licensed by the Reserve Bank on 1 June.