New York Insurance Superintendent Eric Dinallo, breaking away from other states' regulators, said today he planned to do away with collateral requirements for foreign reinsurers with good financial ratings.

The proposed regulation, which some insurance groups called risky and radical, would go into effect in July of 2008. Under the new rule the highest rated U.S. and non-U.S. reinsurance companies not authorized or accredited to do business in New York will be treated the same as New York reinsurance companies.

Discussions about a change in the requirement for non-accredited insurers to post collateral have been underway for years at the National Association of Insurance Commissioners. Earlier this year, an NAIC task force considered a Reinsurance Evaluation Office proposal to establish a system for a reinsurer's collateral to be based on its financial strength. That initiative has not gone forward.

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