The New York State Insurance Department has proposed changes to its collateral reinsurance regulations in a bid to attract more reinsurance capital to the state.

Under the new proposals, non-domiciled well-capitalised reinsurers with the highest credit rating will no longer have to post collateral equal to their share of policyholder claims.

Other less well-capitalised companies will also be treated more leniently under a sliding collateral scale of between 10% and 100%.

Subject to a formal proposal process, the regulations are scheduled to take effect on July 1 next year.