Florida Allows Reinsurer Alterra Bermuda to Reduce Collateral

March 29, 2011

Another reinsurer has stepped forward to take advantage of a Florida law that allows it to lower its collateral and still conduct business in the state.

Florida regulators announced that Alterra Bermuda Limited has been authorized to reduce its collateral amount from 100 percent to 20 percent under the terms of a 2007 law that is attracting new capital to the state.

Alterra is the tenth Bermuda reinsurer and eleventh overall to be authorized by Florida for lower collateral.

Under the law, reinsurers may be authorized to reduce their collateral amount if they have at least $100 million in capital and surplus and scored a top rating by at least two nationally recognized rating agencies.

Florida was the first state to enact such a law, which has been adopted in a similar form by New York and is being considered by other states.

Other reinsurers authorized under the law in Florida include: Hannover Ruckversicherung AG (Hannover Re – Germany), Hannover Re (Bermuda), XL Re Ltd., Ace Tempest Reinsurance, Hiscox Insurance Co., Partner Reinsurance Co., Renaissance Reinsurance, Tokio Millennium Re Ltd. (Tokio), Allied World Assurance Co.LTD (Allied), and Montpelier Reinsurance Ltd (Montpelier).

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