Debate over U.S. collateral requirements persists

Representatives of the insurance industry are tied in debate over U.S. collateral requirements for alien reinsurers, according to a recent A.M. Best roundtable discussion.
The focus of the roundtable debate is the new initiative, which was implemented by the National Association of Insurance Commissioners’ reinsurance task force, to draft a proposal to change the regulations regarding U.S. collateral requirements for alien reinsurers.
BestWeek approached three insurance executives regarding the issue.
William R. Berkley, chairman and chief executive officer of US-based insurer and reinsurer W.R. Berkley Corp., defends the current collateral structure. BestWeek reports that Berkley says it is the best method available for ensure claims payments for U.S. insurers.
Julian James, director of worldwide markets for Lloyd’s of London, however says the structures requirements hamper foreign players in the U.S. market, which he told BestWeek, will constrain reinsurance capacity and raise costs.
Pierre Ozendo, chairman and CEO of Swiss Re America, says the U.S. collateral requirements are only one part of a larger issue: “the need to work out a comprehensive global regulatory framework in which reinsurers all can operate under the same set of rules.”