Florida’s Low Collateral Rule Attracts 3 More Reinsurers

November 14, 2010

Florida insurance officials have agreed that three Bermuda-based reinsurers can participate in Florida’s insurance marketplace without having to post millions of dollars in extra collateral.

The Office of Insurance Regulation’s (OIR) agreements are with Ace Tempest Reinsurance Ltd., Hiscox Insurance Co. Limited, and Partner Reinsurance Co. Ltd. State officials say these foreign reinsurers, along with three others for which collateral requirements were previously lowered, are financially strong enough such that they do not have to post 100 percent collateral, which the state may still require of other foreign and unaccredited reinsurers.

The 100 percent collateral requirement has been cited as a barrier to investment by foreign reinsurers in the Florida market.

In 2007, Florida lawmakers, hoping to increase the number of reinsurers doing business in the state, authorized the OIR to establish lower collateral requirements for alien (non-U.S.) reinsurers that are highly-rated and financially sound. The OIR may now approve collateral requirements on a scale of from 0 to 100 percent, depending upon the strength of the foreign reinsurer’s financial ratings.

The OIR has now authorized a total of six reinsurers to operate in Florida under reduced collateral terms. The three approved earlier this year were Hannover Reinsurance, Hannover Insurance (Bermuda), and XL Re Ltd.

Was this article valuable?

Here are more articles you may enjoy.

From This Issue

Insurance Journal Magazine November 15, 2010
November 15, 2010
Insurance Journal Magazine

Contractors & Builders; Long-Term Healthcare Liability; Top Personal Lines Retail Agencies