XXX financing market braced for increased captive scrutiny
Reserve financing using offshore captives is big business in the US. Yet what started as an innovative method of moving excessive reserve requirements off balance sheet has turned, in some regulators’ minds, into a dark art that puts policyholder protection at risk. Louie Woodall reports
A no-holds-barred fight is raging between US insurers and regulators over the future of reserve financing. The furore centres on redundant reserves – the additional statutory reserves for certain life products that go above and beyond what insurers’ internal economic models deem prudent – and the methods that US firms are deploying to fund them.
Yet, in this conflict, the battle lines are far from clear, with some state regulators taking the insurance industry’s side, while others are taking a
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Insurance-linked securities
Extreme mortality bond issuance predicted to expand as spreads tighten
Successful placement of SCOR bond indicates increased investor appetite for life risk
Cat bond ‘lite’ structures raise contamination risk and insolvency fears
Investors and lawyers voice concerns about using segregated accounts structure to issue streamlined cat bond instruments
Asia-based cat bond issuance unlikely
A catastrophe bond from an Asian-based issuer is unlikely in the near term due to the high cost relative to traditional reinsurance
Cat bond market poised to boom in 2013
Bond boom
Value of multi-peril cat bonds challenged
Combining uncorrelated perils does not necessarily make bond more attractive and presents valuation challenges, say bankers
