Lloyd's, Fla. Gov. Crist Discuss Climate, Collateral

For the second time since spring, Lloyd's Chairman Lord Peter Levene has met with a U.S. governor to discuss global warming initiatives and other industry issues, but the meetings were coincidental, not part of a plan to meet with state executives, Lloyd's said.

Lord Levene met Tuesday with Florida Gov. Charlie Crist, as part of the Team Florida Trade and Business Development Mission to the United Kingdom.

On April 28, Lord Levene met with California Gov. Arnold Schwarzenegger at the state capitol in Sacramento and discussed global warming and other insurance industry topics, including U.S. collateral requirements for foreign reinsurers.

"There's no scheduled program of meetings," said Louise Shield, head of communications for Lloyd's, out of the London office. She told National Underwriter that Florida and California are "two states we do an awful lot of business with and are facing a number of problems that we've been talking about."

During the meeting, Lord Levene and Gov. Crist discussed the impact of climate change and ways the state and the market can work together to combat and manage this threat.

The governor was particularly interested in the Climate Wise initiative of which Lloyd's is a founding member, Lloyd's said. The Climate Wise principles provide a framework for insurance companies worldwide to establish climate change in their business operations.

The principles were developed following consultation between The Prince of Wales's Business & the Environment Program, Lloyd's and other insurance market participants.

Gov. Crist also met with the Prince of Wales to continue his dialogue on ways Florida can work with Climate Wise to extend the principles to the U.S., Lloyd's reported.

Gov. Crist said climate change and rising sea levels are of "particular concern to Florida, which boasts over 1,300 miles of coast and where 80 percent of the population lives within 10 miles of the coast," said Lloyd's.

Lord Levene also raised the issue of U.S. reinsurance collateral requirements that require Lloyd's to deposit $14 billion in trust funds in New York. Lloyd's said the practice discriminates against insurers "on the basis of geographical location rather than financial security."

Florida recently announced a proposal to revise its collateral requirement, and Lord Levene thanked both the governor and Insurance Commissioner Kevin McCarty for their work in ensuring a competitive environment for reinsurers in the locality, Lloyd's said, adding that the governor in turn praised Lloyd's for its role in Florida--particularly in times of crisis--and for the trust that the market has established in the state.

Florida is Lloyd's second largest U.S. state, as a source of business, with the market writing more than $1 billion worth of business there. The market is one of the leading property reinsurers and has paid out nearly $1 billion of claims to homeowners and businesses following hurricanes Katrina, Rita and Wilma in Florida alone, Lloyd's said.

Lord Levene told NU in April, "Lloyd's has business of more than $1 billion in California, which is more than our total business in France and Germany."