Alterra Capital Holdings Limited announced that the State of New York Insurance Department has approved Alterra Bermuda Limited “as an eligible reinsurer for reduced collateral status, which allows lower collateral requirements for non-domestic reinsurers that are highly rated and financially secure.”
The approval is a result of repeated calls, especially from Lloyd’s, for “alien” reinsurers to be relieved of the onerous 100 percent requirement.
The decision means that Alterra Bermuda will now be able to post collateral for 20 percent of property and casualty reinsurance loss reserves in New York rather than the 100 percent required by most non-US reinsurers.
New York is currently among a small group of states within the US to amend its collateral rules to reduce the deposits required. It effectively lowers the barriers for market entry for non-US reinsurers. Alterra Bermuda was previously approved as an eligible reinsurer for reduced collateral status by the State of Florida.
The New York Insurance Department reviews reinsurers for approval after companies “undergo a selective application process requiring them to have capital and surplus of at least $250 million, proof of financial strength by at least two nationally recognized rating organizations, and evidence of continued financial soundness and stability,” Alterra explained.
Source: Alterra Capital Holdings Limited
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