XL Group announced that two of its Bermuda-based subsidiaries, XL Insurance and XL Re, have received approval from the New York Insurance Department (the “NYID”) to qualify for reduced collateral status in the state of New York pursuant to requirements set forth by New York insurance regulation.
At the beginning of this year, New York passed amendments to New York insurance regulation allowing the NYID Superintendent of Insurance to establish lower collateral requirements for foreign (re)insurers that, among other criteria, are considered financially strong by credit rating agencies and other industry regulators.
Under the amendment both XLIB and XL Re Ltd can post collateral for 20 percent of loss reserves rather than the 100 percent required of non-eligible foreign (re)insurers.
In its approval letter to XLIB and XL Re Ltd, the NYID cited various reasons for granting approval including the entities’ secure financial strength ratings and strong solvency position.
XL Chief Executive Officer, Mike McGavick, said: “We are extremely pleased with the NYID’s decision and the fact that another US insurance regulator has recognized XL’s financial position. Once again XL is proud to be among the list of Bermuda companies who have qualified for reduced collateral status in a US state. Last year, XL Re Ltd was the first Bermuda reinsurer to be granted similar status in Florida by the Florida Office of Insurance Regulation. The elimination of unnecessary collateral requirements on foreign insurers and reinsurers is not only beneficial for the individual companies but for the industry as a whole. We are encouraged by New York’s elimination of these collateral requirements and we remain fully committed to meeting the needs of our clients in New York and around the world.”
Source : XL Group Press Release