Florida is at the forefront in modernizing insurance regulations by encouraging and attracting international reinsurance capital.
With Florida’s exposure to hurricane risk greater than any other state, it is important to take advantage of such concepts as reduced
collateral for qualified companies.
The catalyst for such a change began prior to 2007, when reinsurance companies from outside the United States generally were
required to post 100 percent collateral to write reinsurance in the United States while U.S.-based reinsurers posted no collateral.
The collateral requirement had been cited as a barrier by foreign reinsurers to invest in Florida.
Following 2007 legislative action and subsequent rule-making in 2008, the Office of Insurance Regulation (Office) was allowed to
establish lower collateral requirements for non-U.S.-based reinsurers. These reinsurers had to be highly-rated and financially sound
meeting stringent capital and surplus requirements.
In 2010, Florida signed the first agreement in the United States with an eligible non-U.S.-based reinsurer – Hannover
Ruckversicherung AG, based in Germany. There are now more than 20 eligible reinsurers operating in Florida. These eligible
reinsurers are based in Bermuda, Germany or the United Kingdom.
Florida was also the first state to allow ceding insurance companies to receive full credit on their financial statements for
reinsurance purchased from non-U.S.-based reinsurers.
Other states have since followed Florida’s lead and adopted similar provisions in their laws.