Insurer QBE confirmed on Friday that it has decided to stop underwriting lenders' mortgage insurance in New Zealand. In a brief statement, the company said the move was driven by "diminishing demand".QBE LMI will continue to honour existing policies in New Zealand. It will also continue to underwrite LMI in Australia.Interest.co.nz reported that at least one lender, state-owned Kiwibank, plans to self-insure loans with loan-to-valuation ratios above 80 per cent.QBE would not comment on the impact of prudential policy changes in New Zealand, but its decision to leave the New Zealand market may have been prompted, in part, by the Reserve Bank of New Zealand's imposition of "speed limits" on high LVR lending.Later this year, New Zealand mortgage lenders will be required to put aside additional capital if their proportion of loans with an LVR of above 80 per cent goes above a set limit (which is likely to be 12 per cent of total mortgage lending).