NY governor signals ease on barriers to foreign reinsurers
New York governor David Paterson has dropped the biggest hint yet that it could relax regulatory barriers against foreign (re)insurers, according to reports last week.
Paterson, who took over from disgraced former governor Eliot Spitzer, said dropping regulatory barriers could prevent the jurisdiction from being overtaken by China and India.
The governor said the state would “probably” ease rules requiring foreign (re)insurers to post collateral when facing claims this year.
“New York is regulating itself out of the global market, being overtaken by India and China,” he is reported to have said.
Paterson said the issue would have to be “cleared up across the board”, acknowledging the part played by individual states in regulating the insurance industry.
The admission comes as Lloyd’s chairman Lord Levene also called for regulatory barriers to be removed at the inaugural Lloyd’s New York City Dinner last week.
He said: “One of the issues which European reinsurers complain about in the US is US reinsurance regulation, which discriminates according to geography rather than financial strength.
“No other major reinsurance market in the world has such requirements and progressive-minded state regulators have long been advocating change.”
Levene said he had been encouraged by the co-operative stance taken by the New York Superintendent of Insurance, Eric Dinallo.
He added: “The current credit crisis only highlights the international nature of our markets and the need for a better harmonised, more integrated infrastructure.
“Our response needs to be well thought-through and we must avoid regulation, which could harm us on either side of the Atlantic.”