Certified Reinsurance - Financial Strength
Could you explain why certified reinsurance has considered the financial strength of the reinsurer but the authorized and non-authorized are not? Thanks.
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Could you explain why certified reinsurance has considered the financial strength of the reinsurer but the authorized and non-authorized are not? Thanks.
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Up until 2012, all unauthorized reinsurers were considered a higher credit risk and their reinsurance provision was promulgated accordingly. Since 2012, the avenue of becoming certified by an entity's domiciliary state was given to these unauthorized reinsurers. Becoming certified is contingent on their financial strength. The reinsurance provision for these reinsurers were reduced commensurate with their becoming certified.