Collateral Rule Is Unfair,
Says Lord Peter Levene
International Editor
London
Lord Peter Levene says Lloyds continues to be in "serious dialogue" with U.S. insurance commissioners to change the current collateral requirement whereby alien reinsurers must maintain funds equal to 100 percent of U.S. liabilities.
The requirement "is totally unfair and unreasonable and unjust," he says. However, the United States is Lloyds biggest market, "so weve got to get it sorted."
"If the Italians put this regime on U.S. [reinsurers], there would be all hell let loose," he stresses. "Of course, what makes it 50 times worse is the fact that we are not dealing with one U.S. authority; we are dealing with different authorities in every single state," he contends.
Nevertheless, he says, negotiations are being conducted at a very senior level and Lloyds views are well understood.
"Quite how we can take it forward, I dont know, but were getting a sympathetic hearing. That doesnt mean to say its going to solve the problem, but we have to start somewhere," he says.
Reproduced from National Underwriter Edition, March 31, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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