Recent Developments For Reinsurance Collateral Requirements In The United States

As a general matter, non-US reinsurers must post 100% collateral for reinsurance assumed from a US ceding company in order for the ceding company to receive credit for reinsurance on its statutory financial statements. In recent years, various US states have amended their credit for reinsurance requirements to allow "certified" non-US reinsurers to post less than 100% collateral while still allowing US ceding companies to receive full credit for reinsurance ceded to such reinsurers. However, the revised reinsurance collateral requirements have not been adopted across all the states, and states that have adopted such changes have not done so uniformly. As a result, the US federal government may adopt a more active role on this issue.