SECOND REINSURER APPROVED FOR FLORIDA REDUCED COLLATERAL REGULATION
The Florida Office of Insurance Regulation (“OIR”) has approved XL Re Ltd. as the second non-Florida reinsurer to operate in Florida without having to post 100 percent collateral. The approval is pursuant to a Florida regulation, 69O-144.007, which allows credit for reinsurance without full collateral for transactions involving reinsurers not domiciled in Florida, provided that certain requirements are satisfied. The requirements include, among other requirements:
- the reinsurer must obtain financial ratings from no less than two approved rating agencies;
- the percentage of collateral required is determined based upon the lowest rating;
- the reinsurer must consent to service of process and jurisdiction;
- the reinsurer and its regulator must provide periodic financial and other information to the OIR; and
- the reinsurer must hold surplus in excess of $100 million.
Hannover Re was the first reinsurer approved for reduced collateral transactions under this regulation.
This post written by Rollie Goss.
