Reinsurer only needs to post 20% collateral
The Florida Office of Insurance Regulation has granted Tokio Millennium Re the right to only post collateral equivalent to 20% of the risk it writes in the state.
Non-US insurers writing in Florida typically have to post 100% collateral, but the state has been gradually relaxing this for certain reinsurers. Bermuda-based Tokio Millennium Re is the seventh non-US reinsurer to be allowed to post lower collateral in Florida.
“I am very pleased with the decision by the Florida Office of Insurance Regulation and that our financial strength has been recognised by the regulator," said Tokio Millennium Re chief executive Tatsuhiko Hoshina. "We endeavour to obtain similar status in other states and hope that more US states will agree to lower the collateral requirements for foreign reinsurers.”
The changes follow the passsage of legislation in Florida in 2007 to allow collateral requirements to be lowered for highly-rated and financially-sound reinsurers. Reinsurers can be considered for this policy after undergoing a selective application process which requires them to have capital and surplus of at least $100m, proof of financial strength by at least two nationally recognised rating organisations, and evidence of continued financial soundness and stability.