The London Market needs to make a collective effort to help reform strict funding requirements imposed by US regulators on foreign reinsurance companies, said law firm LeBoeuf, Lamb, Green & McRae.
Speaking to the Insurance Institute of London, William Marcoux, a partner of the US law firm, urged London Market reinsurance practitioners to make sure they were aware of proposals to reduce current collateral requirements and to regularly discuss the issue with their US counterparts.
In the US a proposal to reduce the collateral requirements for an `approved list' of highly capitalised reinsurers is currently before both the National Association of Insurance Commissioners and the National Conference of Insurance legislators.
Under present US legislation, foreign reinsurers writing US business must post collateral equal to 100% of gross liabilities.
"There has got to be a solution that is attractive to all parties," Marcoux told an audience at the Old Library in Lloyd's. "Everybody here should ensure that they know what the proposal is and what it involves."
"Know what it is and seek the opportunity to have conversations with your counterparts in the US. There has been an alarming level of misunderstanding about what is being proposed and unnecessary tension has been brought into the commercial sector."
"It is going to be a tough fight, but we remain optimistic that there is some middle ground between the current situation and our proposals," concluded Marcoux.
