EWI Risk Services, a Perr&Knight partner company, recently put out a press release regarding Florida Informational Memorandum OIR-10-01M which "effectively indicates a Florida domiciled company is no longer required to obtain traditional reinsurance protection for a 1 in 100 year CAT storm event. Further, the Memorandum encourages companies to 'consider risk transfer alternatives other than traditional reinsurance'”.

Further, per EWI, "there are several key ramifications arising from this policy change:

1. It is increasingly likely that the Departments of Insurance in other coastal states will move
   to adopt similar policies as respects traditional reinsurance requirements
   
2. In such coastal states, the 1 in 250 year standard may also be subject to a similar policy
   revision
   
3. Reinsurance CAT capacity, already in an increasingly ample supply, will show further
   price and capacity easing as the (eventual) diminished demand for Florida traditional
   CAT capacity will be released by reinsurers to other “peak zones” and other property
   CAT exposure categories.
   
4. This policy change will be a significant catalyst impacting the evolution of regional capital
   markets solutions. These products are evolving from “mega” single sponsor type
   vehicles at present to more regional vehicles that will allow smaller entities to access
   them on a subscription basis. Such broad, subscription based, products are the logical
   extension of the relatively nascent capital markets tools that have been heretofore
   available within the industry. Thus, smaller carriers will eventually have access to similar
   capital markets tools that have benefited national carriers for several years."

EWI is a specialist in the organization and operation of Captive insurance companies and other alternative risk entities. Perr&Knight is is a leading provider of insurance support services, including Actuarial Consulting, Competitive Intelligence, Data Services, Management Consulting and Regulatory Compliance. Together, EWI and Perr&Knight provide a complete solution for companies affected by this change, from reinsurance and risk management consulting, to expert actuarial analysis and industry-leading state filings services.

Click here to download the full press release from EWI.