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FIO may lead US to relax collateral: Lloyd's

25 June 2010

The likely establishment of a federal insurance office within a regulatory overhaul of financial institutions in the US may lead to collateral rules for non-US reinsurers eventually being relaxed at a federal level, believes Lloyd’s of London.

Read more: Office of National Insurance ONI Solvency II Lloyd's Sean McGovern collateral rules

The likely establishment of a federal insurance office within a regulatory overhaul of financial institutions in the US may lead to collateral rules for non-US reinsurers eventually being relaxed at a federal level, believes Lloyd’s of London.

Sean McGovern, general counsel and director of North America at Lloyd’s, told Reactions that the market is watching developments in US regulation with interest.

“The issue we are trailing very closely is the office of national insurance. We think that could be good. Once the US Treasury can enter into international agreements it can engage with the powers within the EU. In terms of doing a deal with the EU we see it as a way to get the removal of collateral requirements. At the moment there is no recognition of regulatory quality. We are an industry that is regulated through the collateral requirements in the US.”

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