NU Online News Service, July 8, 2:38 p.m. EDT
Alterra Capital Holdings Ltd. says reinsurance subsidiary Alterra Bermuda has been approved by the New York Insurance Department to post reduced collateral when doing business in the Empire State.
Recently Alterra became the 11th eligible reinsurer in Florida to post reduced collateral.
Following Florida's lead, New York, and most recently New Jersey, passed laws allowing foreign reinsurers to post less collateral when doing business in these states, as long as the reinsurer 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 reduced collateral requirements that allow foreign reinsurers to post collateral for 20 percent of property and casualty reinsurance loss reserves in a state rather than 100 percent, which was the practice in every state. U.S reinsurers post no collateral.
Regulators say lowering the collateral requirements improves overall capacity and entices more reinsurers to spread risk.
Florida has approved 16 non-U.S. reinsurers to operate in the Sunshine State with reduced collateral requirements. Last month, regulators approved Ariel Reinsurance Co. and DaVinci Reinsurance.
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