Office Authorizes Non-U.S. Reinsurer to Operate with Reduced Collateral Requirements
– The Florida Office of Insurance Regulation (Office) today announced the ninth agreement of its kind, which authorizes a reinsurer to post reduced collateral requirements to operate in Florida. The Office specifies the terms in a Consent Order
with Allied World Assurance Company, LTD (Allied), a Bermuda-based company. This announcement makes Allied the eighth authorized Bermuda reinsurer to operate with similar reduced collateral terms; the other reinsurer was from Germany.
"We are encouraged by the number of reinsurers who are participating in Florida's market by taking advantage of the reduced collateral requirements," said Insurance Commissioner Kevin McCarty. "Reinsurers continue to provide a critical risk-sharing role in Florida’s complex property insurance market."
Allied reported a capital and surplus of more than $3 billion, which exceeds the $100 million requirement. The reinsurer also indicated secure financial strength by demonstrating favorable ratings from at least two nationally recognized statistical rating organizations.
Reinsurance continues to be an important part of the property insurance market in the United States. In 2005, Hurricanes Katrina, Wilma and Rita caused an estimated $72.7 billion in insured losses; reinsurers paid roughly 61 percent of this total cost.