Florida has added its first reinsurer from the United Kingdom to a list of reinsurers taking advantage of a state law that reduces reinsurers’ capital requirements.
In an effort to attract more private capital to the state, lawmakers in 2009 passed a law allowing off-shore reinsurers to do business in the state to reduce their collateral to 20 percent as opposed to 100 percent if they meet certain criteria. Specifically, the law calls for reinsurers to have at least $100 million in capital and surplus and have scored a top rating by at least two nationally recognized rating agencies.
Lloyd’s reported a statutory capital and surplus of $29.9 billion, which exceeds the $250 million requirement. The reinsurer also has the necessary high rating from two national statistical agencies. Lloyds has already been granted similar status as an eligible reinsurer in New York.
Florida is the first state to allow ceding insurance companies to receive full credit on their financial statements for reinsurance purchased from non-U.S. based reinsurers that are highly rated and financially sound. New York has adopted a similar law, while New Jersey, Illinois, Indiana and Louisiana are also considering similar measures.
Lloyds joins a list that includes the following: Ace Tempest Reinsurance, Allied World Assurance Co. Ltd., Arch Re, Alterra Bermuda Limited, Ariel Reinsurance Co. Ltd., Aspen Insurance Ltd., Axis Specialty Ltd., DaVinci Reinsurance Ltd., Montpelier Reinsurance Limited, Tokio Millennium Re, subsidiary of Tokio Marine & Nichido Fire Insurance., Ltd., Renaissance Reinsurance, Partner Reinsurance, Hiscox Insurance Co., XL Re Ltd., Hannover Re (Bermuda) and Hannover Re (Germany) and Allied World Assurance Co. LTD.
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