NU Online News Service, July 8, 2:38 p.m.EDT
|Alterra Capital Holdings Ltd. says reinsurance subsidiaryAlterra Bermuda has been approved by the New York InsuranceDepartment to post reduced collateral when doing business in theEmpire State.
|Recently Alterra became the 11th eligible reinsurer in Floridato post reduced collateral.
|Following Florida's lead, New York, and most recently New Jersey, passed laws allowing foreign reinsurers to postless collateral when doing business in these states, as long as thereinsurer is highly rated and financially sound.
|In New York and New Jersey, reinsurers are required to carry$250 million in surplus. Florida requires $100 million.
|Illinois, Indiana and Louisiana are considering similar reducedcollateral requirements that allow foreign reinsurers to postcollateral for 20 percent of property and casualtyreinsurance loss reserves in a state rather than 100 percent, whichwas the practice in every state. U.S reinsurers post nocollateral.
|Regulators say lowering the collateral requirements improvesoverall capacity and entices more reinsurers to spread risk.
|Florida has approved 16 non-U.S. reinsurers to operate in theSunshine State with reduced collateral requirements. Last month, regulators approved Ariel Reinsurance Co. andDaVinci Reinsurance.
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