33.1 The financial security of reinsurers and retrocessionaires has been one of the most important recurring causes of concern for the London and international markets during the last decade. The debate about this subject has been triggered by the insolvency of a number of insurers and reinsurers, particularly in the United States. It is, therefore, not surprising that there is increasing interest about the solvency of reinsurers and methods of enhancing the security of reinsureds. One such method, which is particularly significant in the context of North American business, is the letter of credit or “LOC”.