Rhode Island made new amendments to its Protected Cell Company Act and Voluntary Restructuring of Solvent Insurers Law that will make the execution of run-off transactions easier.
HB 8163, which was introduced to the House on 4 May 2018, was passed unanimously and will come into immediate effect following the Governor’s signature.
The amendments will open the door to the $100 billion market in US transactions via books of legacy business.
The Voluntary Restructuring of Solvent Insurers Law will authorise both insurers and reinsurers to cede run-off commercial books with court-sanctioned finality in a similar fashion to a Part VII of the UK’s Financial Services and Markets Act in the UK.
Last year, ProTucket Insurance became the first Rhode Island domestic insurer created to provide run-off portfolio transfer solutions under the Voluntary Restructuring of Solvent Insurers Law.
The bill was supported by Pro Global, the Department of Business Regulation, the Property Casualty Insurers Association, Locke Lord, the Governor’s Chief of Staff Brett Smiley and Governor Raimondo.
Mory Katz, managing director of US at Pro Global, thanked “everyone who worked so diligently to get these amendments passed”.
Katz added: “This bill has the potential to ignite economic development and bring hundreds of millions in capital to Rhode Island.”
“The changes that have been passed will now strengthen the existing regulation by reducing potential ambiguities in how the law is applied.”
According to Katz, the legislative changes allow Rhode Island to be a leader in the market and will mean increased occupational opportunities in the state.
He explained: “The amendments to the Voluntary Restructuring of Solvent Insurers Law and Protected Cell Companies Act show there is a real willingness in government, not just business, to make the law work. There is a consensus that it’s good for the industry and good for the state.”
“This establishes Rhode Island as a center of excellence for the US run-off sector.“