NY Reinsurance Collateral Proposal

Reinsurance regulation in the U.S. has long been a broad  issue of debate about which different parts of the industry have varying opinions. Last week’s proposal put forward by New York insurance superintendent Eric Dinallo addresses just one area of the debate: collateral requirements. Currently, any U.S. or non-U.S. reinsurance company that is not authorized or accredited to do business in New York must post collateral equal to 100 percent of its share of policyholder claims. Under Superintendent Dinallo’s proposal, well-capitalized non-authorized reinsurers with the highest credit rating doing business in New York would be treated on an equal footing with authorized companies and would no longer be required to post collateral. Companies that are not as strong would still have to post collateral on a sliding scale from 10 to 100 percent. New York is the first state to suggest the change and it remains to be seen how other states may react. Clearly, reinsurance is an international business that enables risks to be spread more widely. It plays a critical role by increasing capacity in the global insurance marketplace and offering catastrophe protection. But from insurers’ perspective concerns have been raised over ceding insurer solvency and reinsurance recoverables. We welcome your comments on this issue.  Check out the NAIC for further information on its reinsurance modernization proposal. Check out  further I.I.I. facts & stats on reinsurance.

One thought on “NY Reinsurance Collateral Proposal”

Leave a Reply

Your email address will not be published. Required fields are marked *