US collateral debate creates animosity

European reinsurers and the National Association of Insurance Commissioners (NAIC) launched a war of words in the UK national press recently, publicly airing the animosity that has grown since the NAIC’s proposal to continue its collateral requirements for all European reinsurers (albeit reducing the 100% rule for the financially strongest firms) replaced an earlier plan that would have treated US reinsurers the same as European reinsurers basing collateral requirements on financial strength ratings.