XL Re Sets Up in Sao Paulo

XL Re, the global reinsurance operations of XL Capital, has received regulatory approval to serve the Brazilian insurance market as a local reinsurer incorporated in Brazil and regulated by Brazilian authorities. In June, XL Re was approved to operate as an admitted reinsurer, incorporated and regulated outside Brazil, but with local representation. XL Re Brazil will have full offices in Rio and Sao Paulo under regional operating officer Carlos Caputo. “This approval signals the beginning of XL Re’s service to the entire Brazilian insurance market from both admitted and local reinsurance platforms. Our 2-platform approach speaks to our long-term commitment to the Brazilian market,” says James H. Veghte, chief executive of XL Re. The law that ended Brazil’s 69-year regulated reinsurance monopoly grants local reinsurers right of first-refusal for 100% of ceded reinsurance, 60% of which must be placed in the local market until 2010. Up to 40% of business must be placed in the local market thereafter, says XL.