Hannover Re (Bermuda)'s requirement reduced to 20%
The Florida Office of Insurance Regulation has recognised German reinsurer Hannover Re's Bermudan subsidiary as an "eligible reinsurer", which means it only needs to post collateral equivalent to 20% its loss reserves for the non-life business it writes in the state.
As a foreign insurer, Hannover Re (Bermuda) had to post collateral equivalent to 100% of its loss reserves for non-life business written in Florida.
Hannover Re itself became an eligible reinsurer in Florida in February this year, and has enjoyed the reduced collateral requirements in the state since then. Hannover Re said it was the first foreign reiinsurer to qualify as an eligible reinsurer in the state.
"We welcome the decision of the Florida Office of Insurance Regulation and hope that other US states will also reduce the collateral requirements for foreign reinsurers", said Hannover Re's chief executive Ulrich Wallin.
Florida is the only US state to approve a rule imposing lower collateral requirements on foreign reinsurers that are highly rated and financially secure.