Pro Global Insurance Solutions plc announced that it has become the first company to file an application for a new domestic insurer in Rhode Island to facilitate insurance business transfers (IBT) under the August 2015 amendment to the state’s Insurance Regulation 68.
Pro Global is a London-based reinsurance and insurance services provider and consultancy with more than 25 years of experience internationally managing run-offs.
The company said Rhode Island’s Insurance Regulation 68, modeled after the Part VII in the U.K., allows for the transfer of portfolios of business into a Rhode Island protected cell company.
Pro Global said it is expected to form the first Rhode Island carrier established specifically to accept run-off portfolios, subject to regulatory approval. The new entity will be called ProTucket.
Rhode Island’s recently amended regulation balances stakeholder interests and fills “a tremendous need” in the U.S. insurance market, with the value of U.S. business in run-off estimated to be as much as $100 billion, according to Pro Global.
Insurance business transfers free up trapped capital, management, and administrative resources, Pro Global said. The company noted that until now, a run-off portfolio in the U.S. had to be managed in its entirety; and existing methods of disposing of a run-off portfolio did not provide true finality to the transferring entity.
In 2007 Rhode Island legislature changed the statute to allow reinsurers and insurers to transfer blocks of business into a shell company in Rhode Island. The 2015 update of Insurance Regulation 68 now provides a process to separate run-off portfolios and “lift and drop” them into separate protected cells within a single Rhode Island domestic insurer that assumes the risk of the run-off portfolio by means of a statutory novation.
Pro Global said the ability to transfer separate run-off portfolios combined with the finality of the statutory novation to the Rhode Island insurer will provide reinsurers and insurers with insurance business transfer options previously unavailable in the U.S.
“We have worked closely with the regulator as they have ushered in this ground-breaking regulation and we are the first to file for a new carrier,” Pro Global’s U.S. Managing Director Mory Katz said.
“Pro’s Rhode Island 68 carrier, ‘ProTucket’, will continue our growth in the United States and establish us as a major player in legacy services in the U.S., as we are in the U.K.,” Katz said. “This move reinforces our intention to be a leading reinsurance and insurance services provider in the U.S.”
Was this article valuable?
Here are more articles you may enjoy.