You are here:HomeNews CenterInsurance News2011NY DOI Approves Lloyd's Request to Post Lower Collateral

NY DOI Approves Lloyd's Request to Post Lower Collateral

The New York Insurance Department has approved a request from Lloyd's to post lower collateral on reinsurance contracts, the third time in July the department...
August 3, 2011

The New York Insurance Department has approved a request from Lloyd's to post lower collateral on reinsurance contracts, the third time in July the department granted such approval. To operate within the United States, most foreign reinsurers are required to post collateral for 100 percent of property/casualty loss reserves. But New York and several other states permit internationally based reinsurers to post reduced collateral levels if they can demonstrate a certain threshold of financial stability. In 2009, a key committee within the National Association of Insurance Commissioners signed off on a draft federal bill to lay the foundation for a new reinsurance regulatory framework. The plan failed to come to fruition. New York is not the only state that allows companies to post lower collateral levels. Florida and New Jersey have adopted similar terms. Illinois, Indiana and Louisiana are among the other states considering revising their collateral level requirements.