Florida Lowers Collateral for Montpelier Re

A tenth reinsurer –and ninth from Bermuda– is taking advantage of a Florida law that allows it to post a lower collateral amount while still conducting business in the state.

Florida regulators announced that Montpelier Reinsurance Ltd. has been authorized to meet a lower collateral level after meeting the conditions of the 2007 law that was designed to attract more capital to the state.

Under the law, regulators are authorized to reduce the collateral requirements for foreign reinsurance companies who that had at least $100 million in capital and surplus and were given a high rating by at least two nationally recognized rating agencies. Reinsures who meet these requirements are allowed to post 20 percent of collateral instead of the 100 percent required by other reinsurers. Florida was the first state in the country to enact such a law, which has since been adopted in a similar form by New York.

“The concerted effort to globalize reinsurance and stabilize Florida’s insurance capital is welcome, especially as Florida prepares for the upcoming hurricane season,” said Insurance Commissioner Kevin McCarty.

The other foreign reinsurers granted the reduce collateral amount include: Tokio Millennium Re, subsidiary of Tokio Marine & Nichido Fire Insurance., Ltd., Renaissance Reinsurance, Partner Reinsurance, Hiscox Insurance Co., Ace Tempest Reinsurance, XL Re Ltd., Hannover Re (Bermuda) and Hannover Re (Germany) and Allied.