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Regulation Focus - S&P Report - A question of collateral.

Europe Intelligence Wire

| October 01, 2003 | COPYRIGHT 2003 Financial Times Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

(From Reinsurance)

Demand is growing for changes to the present collateralisation rules for alien reinsurers operating in the US, thanks to a new report by rating agency Standard & Poor's (S&P).

At present US regulators insist that foreign reinsurers provide 100% collateral for business written in the US. However, if a US company provides the reinsurance then this collateralisation requirement is not needed.

This disparity between the two has led to accusations of protectionism.

In April, Lord Levene, the chairman of Lloyd's of London, spoke out against this in a speech in Washington, calling for more sympathetic treatment for foreign reinsurers.

According to S&P, when collateralisation is applied ...

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