Second US state recognises firm as ‘eligible reinsurer’

The New York State Insurance Department has allowed German reinsurer Hannover Re to qualify as an ‘eligible reinsurer’, lowering its collateral requirements.

Foreign reinsurers are required to post 100% collateral against the risks they write in New York, but as an eligible reinsurer, Hannover Re only need post 20%.

The state of Florida because the first US state to reduce collateral requirements for foreign insurers last year.

Hannover said New York’s decision is particularly significant because the state is the largest-volume market in the reinsurer’s US portfolio.

"We welcome the decision of the New York State Insurance Department. It improves free access for international reinsurers to the US market,” said Hannover Re chief executive Ulrich Wallin in a statement. “Given the importance of the state of New York, which has taken this step in the wake of Florida's decision, it is our hope that other US states will follow suit with this regulation.”