Lloyd's has decided not to pursue admitted status in the United States, according to Chief Executive Officer Richard Ward, who joined the market in late April.
In a six-month status report issued last month to Lloyd's franchisees, Mr. Ward–who has yet to speak directly with the media about his plans for the world's oldest insurance market–said that no action will be taken for the time being to obtain admitted status in this country.
"The main reasons for this were the associated regulatory burden, limited franchisee interest and Lloyd's distribution profile within the U.S.," Mr. Ward explained.
The market will review measures to improve access to the U.S. excess and surplus lines market for Lloyd's and report on those efforts at its next board meeting.
Lloyd's has been one of the most forceful advocates over the past few years for easing the 100 percent collateral requirements for alien reinsurers to operate in the United States.
After several years of delay by the National Association of Insurance Commissioners, it appears some movement by the group will take place by year's end, when the regulators are due to consider a new ratings proposal that will treat all reinsurers the same regardless of domiciliary country.
However, that proposal remains in rudimentary form, and much of the U.S. domestic industry still opposes altering the status quo in regard to this issue.
In other developments, Mr. Ward said contributions to the Lloyd's Central Fund–used to pay claims when Lloyd's syndicates and their capital providers are unable to pay claims–will remain at their current level for 2007. "However, if circumstances then allow, we aim to cut the contribution rate in 2008–a year earlier than planned," he added.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.