New US reinsurance and state level collateral page on lloyds.com
State legislation on collateral requirements is changing in the US and Lloyd’s now has a dedicated area on lloyds.com where information on each state can be found.
Earlier in the year we wrote about a reduction in Lloyd’s collateral requirements from 100% to 20% in Pennsylvania. This news follows similar reductions in Florida and New York, where Lloyd’s is approved as a certified reinsurer.
The approval in these states allows Lloyd's syndicates to post reduced collateral where commercially acceptable and practical for the parties to the reinsurance contract.
Following the NAIC’s recognition of the UK as a Qualified Jurisdiction, Lloyd’s is now able to utilise the application process set out under the NAIC’s recently introduced Uniform Certified Reinsurer Application Checklist process. Guided by the commercial priorities of the market, Lloyd’s will now seek to accelerate the application process to gain approval in additional states where reduced collateral is permitted under their insurance code.
In addition to the states in which Lloyd’s is presently approved, there are a further 26 states that have enacted or implemented reduced collateral legislation; of these, 12 are known to have already approved other reinsurance companies.
The new US Reduced Collateral area on lloyds.com contains information about which states have enacted the reduced collateral legislation. Lloyd’s has applied to be a certified reinsurer and its application has been approved.
As further Lloyd’s approvals will not be communicated by market bulletin, please ensure you refer to the US Reduced Collateral page at www.lloyds.com/USReinsuranceCollateral for updates. Lloyd’s will also create a Crystal What’s New item whenever a new approval is obtained.
The Crystal What’s New archive can be accessed via Lloyds.com; additionally, a roundup of the changes on Crystal will continue to be summarised in LITA’s monthly Regulatory Communications Newsletter.
For any related enquiries, please contact Lloyd’s International Trading Advice (LITA).