• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Reinsurance Focus

New reinsurance-related and arbitration developments from Carlton Fields

  • About
    • Events
  • Articles
    • Treaty Tips
    • Special Focus
    • Market
  • Contact
  • Exclusive Content
    • Blog Staff Picks
    • Cat Risks
    • Regulatory Modernization
    • Webinars
  • Subscribe
You are here: Home / Archives for Reinsurance Transactions / Accounting for Reinsurance

Accounting for Reinsurance

PLATINUM UNDERWRITERS IS THE EIGHTEENTH FOREIGN REINSURER ALLOWED TO OPERATE UNDER FLORIDA’S REDUCED COLLATERAL REQUIREMENTS

January 2, 2012 by Carlton Fields

By Consent Order dated December 13, 2011, the Florida Office of Insurance Regulation approved the application of Bermuda reinsurer Platinum Underwriters Bermuda, Ltd. to operate in Florida with posting less than 100% collateral. The Order recites Platinum’s fulfillment of statutory criteria, and notes Platinum’s demonstration of $1.366 billion in capital and surplus and favorable ratings from two accepted agencies. According to the Office’s December 14, 2011 press release, Platinum is the sixteenth Bermuda reinsurer approved to use Florida as its port-of-entry state, in addition to a Germany company and a U.K. company. In the Matter of: Platinum Underwriters Bermuda, Ltd., Case No. 122414-11-CO (Fla. Office of Insurance Regulation Dec. 13, 2011).

This post written by John Pitblado.

See our disclaimer.

Filed Under: Accounting for Reinsurance, Reinsurance Regulation, Reserves, Week's Best Posts

NAIC ADOPTS REINSURANCE COLLATERAL REDUCTION AMENDMENTS TO CREDIT FOR REINSURANCE MODEL LAW AND MODEL REGULATION

November 15, 2011 by Carlton Fields

On November 6, 2011, the NAIC Executive Committee-Plenary adopted revisions to the NAIC’s Credit for Reinsurance Model Law (#785) and Credit for Reinsurance Model Regulation (#786). The revisions, as finally adopted, are substantially in the form covered in our Special Focus analysis of the revisions adopted in September by the Financial Condition (E) Committee, with one notable addition. The Model Law, in new Section 2(J), now imposes certain notification requirements on a ceding company when its reinsurance recoverables from a single reinsurer (or group of assuming companies) exceed specified levels of the ceding company’s surplus or gross written premium. Note: The redlining in these documents is from the NAIC, and apparently shows the differences between the just adopted versions and the previously existing text of the model law and model regulation.

This post written by Anthony Cicchetti.

Filed Under: Accounting for Reinsurance, Reinsurance Regulation, Reserves, Week's Best Posts

LLOYD’S PERMITTED TO OPERATE IN FLORIDA WITH REDUCED COLLATERAL AS “ELIGIBLE REINSURER”

October 19, 2011 by Carlton Fields

Underwriters at Lloyd’s, London was approved by Consent Order of the Florida Office of Insurance Regulation to become the seventeenth reinsurer admitted under Florida’s law allowing foreign reinsurers to post reduced collateral, upon demonstration that it is financially sound and highly rated by eligible ratings institutions. As set forth in the Consent Order, Lloyd’s reported capital and surplus of $29.9 billion, well-exceeding Florida’s $250 million requirement. In re Underwriters at Lloyd’s, London (Fla. O.I.R. Oct. 6, 2011).

This post written by Michael Wolgin.

Filed Under: Accounting for Reinsurance, Reinsurance Regulation, Reserves

CRIMINAL CONVICTIONS RELATING TO GEN RE-AIG FINITE REINSURANCE TRANSACTION VACATED BY COURT OF APPEAL

August 2, 2011 by Carlton Fields

The United States Court of Appeals for the Second Circuit has vacated the criminal convictions of Gen Re and AIG executives stemming from a finite reinsurance transaction with undisclosed payments, which allegedly was intended to improve AIG’s financial statements without transferring any significant risk. A jury had convicted all of the defendants on all charges. The matter was remanded for a new trial. After hundreds of pages of briefing and numerous arguments of prosecutorial misconduct, erroneous evidentiary rulings and improper jury charges, the Court of Appeals found only two bases for vacating the convictions: (1) the admission of three bar charts which linked the decline in AIG’s stock price to the transaction at issue; and (2) a jury charge “that allowed the jury to convict without finding causation.”

The stock price evidence was interesting because the court found that “the charged offenses here do not require a showing of loss causation ….” Nevertheless, the prosecution sought to use causation evidence “to humanize its prosecution” and show that the transaction harmed AIG stockholders who had purchased AIG stock for their retirement accounts or the college funds of their children. The evidence presented the defendants with a dilemma: to allow the jury to attribute the full stock price decline to the transaction or introduce prejudicial evidence “of other besetting scandals, wrongdoing, and potentially illegal actions at AIG.” The defendants sought to sidestep the problem by stipulating to materiality, but the government refused. The court found that the district court’s admission of the charts was inconsistent with other rulings on the stock price issue, and was prejudicial to the defendants.

With respect to the jury charge issue, the court noted that the defendants did not specifically object to the causation instruction, which was the product of competing suggestions by counsel, but that the instruction nevertheless warranted reversal under the plain error rule, as it “is improbable, let alone ‘absolute[ly] certain[],’ that the jury based its verdict on a properly instructed ground.”

This opinion contains an extensive but relatively concise discussion of the finite reinsurance transaction at issue, and of the fact that low risk finite reinsurance transactions are acceptable, “and have their uses,” unless they violate FAS 113, the so-called 10-10 rule, entail no risk, and amount to fraud. The court described how this particular transaction was deliberately structured to conceal certain credits and repayments from the companies’ outside auditors. The court rejected all but two of the defendants’ numerous challenges, including allegations that one key prosecution witness had committed perjury, although it suggested that the government be circumspect about how his testimony is presented in a new trial. A major “take away” from this opinion is the clear holding that finite reinsurance transactions can be the basis for criminal convictions of the executives involved in such transactions. United States v. Ferguson, et al., No. 08-6211-CR (2d Cir. August 1, 2011).

This post written by Rollie Goss.

Filed Under: Accounting for Reinsurance, Alternative Risk Transfers, Contract Formation, Contract Interpretation, Criminal Actions, Reinsurance Transactions, Reserves, Week's Best Posts

TWO MORE BERMUDA-BASED REINSURERS PERMITTED TO OPERATE IN FLORIDA WITH REDUCED COLLATERAL AS AN “ELIGIBLE REINSURER”

June 1, 2011 by Carlton Fields

The Florida Office of Insurance Regulation (FOIR) has approved two more Bermuda-based reinsurance companies, Aspen Insurance Ltd. and AXIS Specialty Ltd., to become an “eligible reinsurer” under Florida law and thereby operate in Florida’s property catastrophe reinsurance market with reduced collateral. Ceding insurance companies may now receive full credit on their financial statements for their Aspen or AXIS Specialty property catastrophe reinsurance ceded without full collateral. These approvals bring to fourteen the number of reinsurance companies approved under this program. In re Aspen Insurance Ltd., Case No. 117338-11-CO (FOIR May 6, 2011) and In re AXIS Specialty Ltd., Case No. 117743-11-CO (FOIR May 23, 2011).

This post written by Michael Wolgin.

Filed Under: Accounting for Reinsurance, Reinsurance Regulation, Week's Best Posts

  • « Go to Previous Page
  • Page 1
  • Interim pages omitted …
  • Page 10
  • Page 11
  • Page 12
  • Page 13
  • Page 14
  • Interim pages omitted …
  • Page 25
  • Go to Next Page »

Primary Sidebar

Carlton Fields Logo

A blog focused on reinsurance and arbitration law and practice by the attorneys of Carlton Fields.

Focused Topics

Hot Topics

Read the results of Artemis’ latest survey of reinsurance market professionals concerning the state of the market and their intentions for 2019.

Recent Updates

Market (1/27/2019)
Articles (1/2/2019)

See our advanced search tips.

Subscribe

If you would like to receive updates to Reinsurance Focus® by email, visit our Subscription page.
© 2008–2025 Carlton Fields, P.A. · Carlton Fields practices law in California as Carlton Fields, LLP · Disclaimers and Conditions of Use

Reinsurance Focus® is a registered service mark of Carlton Fields. All Rights Reserved.

Please send comments and questions to the Reinsurance Focus Administrators

Carlton Fields publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information and educational purposes only, and should not be relied on as if it were advice about a particular fact situation. The distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship with Carlton Fields. This publication may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please contact us. The views set forth herein are the personal views of the author and do not necessarily reflect those of the firm. This site may contain hypertext links to information created and maintained by other entities. Carlton Fields does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside sites. This site may be considered attorney advertising in some jurisdictions.