ProTucket insurance, a subsidiary of London-based Pro Global Insurance Solutions, has been granted a licence by the state of Rhode Island to provide run-off portfolio transfer.
Becoming the first of its kind in the US, the move will allow companies to transfer their insurance business with ProTucket, which is planning to operate in much the same way as UK consolidators, such as Phoenix.
"We estimate the value of US books in run-off, which could benefit from the Rhode Island legislation, to be as much as $100bn," said Artur Niemczewski, chief executive of Pro Global.
"Pro Global has over 25 years' experience in managing run-off internationally and is extremely proud to continue its leading position within the legacy market. We are excited about the pipeline of business this could bring."
Regulation 68 promulgated in the state of Rhode Island enables run-off portfolios to be transferred into a protected cell within a Rhode Island domestic company, similar to Part VII transfers in the UK.
Niemczewski said this legislation will release billions of trapped capital and has the potential to improve capital efficiency in US insurance since this capital can be used elsewhere to enhance insurer solvency.
"Over the next five to ten years we expect this business transfer process to become a standard industry practice and believe that ProTucket will be pivotal in fostering a vibrant run-off market."
Companies:Pro Global