Lloyd’s of London, one of the world’s leading insurance and reinsurance specialists, is entering Florida’s reinsurance market. The company joins several other reinsurance organizations flocking to the state to take advantage of a new law that reduces capital requirements for reinsurers. The law, first introduced in 2009 but only recently passed, is an attempt to attract more foreign reinsurance companies to do business in the state, thereby reinvigorating the somewhat stagnant market. Because of the law, Lloyd’s has been approved to do business in the state.
According to the law, reinsurers must hold at least $100 million in surplus capital to ensure they can weather unforeseeable events. Reinsurers must also hold a high rating from no less than two acclaimed rating agencies. Lloyd’s current capital surplus ranks in the billions and the reinsurer holds high ratings with nearly all notable rating agencies. The company has also won approval to do business in the state of New York.
The coming of Lloyd’s, and other foreign reinsurance agencies, is likely to bring some changes to the state’s insurance industry. Lloyd’s will have to draft new policies to adhere to the state’s regulations and attract business from the established insurance companies in the state. How this will ultimately affect consumers is difficult to say, as Florida is the first state in the U.S. to provide native insurers incentives to do business with foreign reinsurance companies.
