Travelers National Accounts introduced a Money Market Collateral Account solution. The new product, offered exclusively to qualified Travelers National Accounts, Construction and Discover Re customers, provides clients an alternative to posting Letters of Credit (LOCs). Discover Re is the “unbundled” alternative risk transfer unit of Travelers.
Customers that qualify for the Money Market Collateral Account option will be directed to a licensed representative of the securities firm administering the Money Market Collateral Account, who will provide a prospectus, details on investment options and instructions on how to proceed. From there, customers will have the ability to invest the collateral provided to Travelers in a number of National Association of Insurance Commissioners (NAIC) approved Money Market Mutual Funds, U.S. Treasuries or other government instruments. The disbursement of interest, dividends or other investment income in excess of the required collateral amount may be requested on an annual basis.
“This new collateral offering is quite timely given the state of credit markets,” said Bill Malugen, president and CEO, Travelers National Accounts. “Even those customers with sufficient capacity in their credit lines are finding the cost of posting an LOC is up dramatically. The Money Market Collateral Account should allow many Travelers and Discover Re customers to meet their collateral obligations in a more cost effective and efficient manner.”
Source: Travelers,
www.travelers.com
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