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AIS announces charter of reinsurance company

As the business insurance market tightens, ARA Insurance Services (AIS) announces the charter of a reinsurance company, which will help stabilize the insurance market for ARA members.

The charter for ARA Insurance Ltd., located in Georgetown, Cayman Islands, British West Indies, was activated Feb. 23. AIS reported the completion of the charter to the ARA board of directors at its February meeting in Orlando.

According to Phil Kelling, AIS president, "With the creation of ARA Insurance Ltd., ARA members now have two insurance entities that are wholly owned by the association. The agency, AIS, provides coverage through Safeco Insurance," he said. "Creation of the reinsurance company provides members an additional safety net in times of insurance crisis, such as the current hard insurance market."

In a hard market, rates rise, coverage tightens and some insurance companies will leave this market, Kelling said.

"ARA Insurance Ltd. wasn't started a moment too soon," he said. "Everyone is flocking to the alternative market. AIS started early. We developed the concept six years ago, and the ARA board of directors gave us permission to proceed last February."

"This is one of the best opportunities for ARA in years," said Jack Greenfield, chairman of the AIS board of directors. "Now we have the ability to control our destiny in insurance. As we grow, AIS can offer coverage that can solve additional problems in the rental industry."