• 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 / Alternative Risk Transfers

Alternative Risk Transfers

DISPUTE IN ADMINISTRATION OF CATASTROPHE BOND RESULTS IN LAWSUIT

August 5, 2013 by Carlton Fields

A lawsuit has been filed in the United States District Court for the Southern District of New York concerning the administration of the $100 million Mariah Re Ltd. cat bond, which covers severe weather event risks ceded to Mariah Re by American Family Mutual Insurance Company, with an attachment point of $825 million. The Complaint focuses on the modeling and reporting of a particular storm by ISO Services, Inc,. (d/b/a/ Property Claim Service (“PCS”)) and AIR Worldwide Corp. (“AIR”). Payments under the cat bond are based upon estimated loss modeling by PCS, rather than being indemnity based. The Complaint alleges that PCS impropery issued an amended bulletin reporting on the losses resulting from the storm after it had issued its “final report” concerning the storm, and that PCS improperly backdated the replacement report so that it apepared to have been issued prior to the date of its “final report.” It is alleged that as a result of the replacement report, AIR’s calculation of the losses purportedly chargeable to Mariah Re resulting from the storm increased from $62.2 million to approximately $180.1 million. Apparently, American Family withdrew the entire $100 million limit of the cat bond from the cat bond’s reinsurance trust, approximately $37.8 million more than what it is alleged should have been withdrawn.

Disputes over the administration cat bonds are rare. One source has suggested that this is the first lawsuit concerning the administration of cat bonds. This lawsuit raises the interesting question of whether the use of non-indemnity payment triggers in cat bonds exposes ceding insurers to potential litigation risks which an indemnity payment trigger would avoid.

This post written by Rollie Goss.

See our disclaimer.

Filed Under: Alternative Risk Transfers, Week's Best Posts

CFPB ENTERS INTO SETTLEMENT PROHIBITING CAPTIVE MORTGAGE REINSURANCE

April 23, 2013 by Carlton Fields

The Consumer Financial Protection Bureau (“CFPB”) recently filed complaints in the Southern District of Florida against Genworth Mortgage Insurance Corporation, Mortgage Guaranty Insurance Corporation, Radian Guaranty Inc., and United Guaranty Corporation alleging violations of the Real Estate Settlement Procedures Act (“RESPA”) by engaging in the practice of paying kickbacks to captive reinsurance affiliates of mortgage lenders in exchange for referrals. All four mortgage insurers have agreed to consent orders, which inter alia (1) prohibit them from entering into any new captive mortgage reinsurance arrangements for a period of ten years, regardless of whether the arrangement includes any payments that might be interpreted as kickbacks, (2) prohibit them from accessing funds held in trust related to existing reinsurance arrangements other than for the reimbursement of reinsurance claims, (3) impose a civil penalty ranging from $2.6 to $4.5 million each, and (4) require them to submit to compliance monitoring and reporting to the CFPB. The fact that these settlements prohibit any captive reinsurance agreements for ten years, whether or not a “kickback” payment was involved, seems to overreach the allegations of the Complaints. See, e.g., CFPB v. Radian Guaranty Inc., Case No. 13-21188 (S.D. Fla. Apr. 9, 2013) (Order granting motion to approve consent judgment and Complaint).

This post written by Abigail Kortz.

See our disclaimer.

Filed Under: Alternative Risk Transfers, Contract Formation, Reinsurance Regulation, Week's Best Posts

SPECIAL FOCUS: RECENT DEVELOPMENTS IN THE CAT BOND AND REINSURANCE MARKETS

April 22, 2013 by Carlton Fields

There has been significant development in both the cat bond and traditional reinsurance markets so far in 2013, with the emergence of competition between the markets, new bond terms, a cash influx into the reinsurance sector, a re-examination of business strategies and pricing reductions in both markets. Reinsurance Focus Blogmaster Rollie Goss, who has been representing ceding insurers in both cat bond and traditional reinsurance transactions, analyzes these developments in a Special Focus article titled The Developing Relationship Between the Catastrophe Bond and Traditional Reinsurance Markets.

This post written by Rollie Goss.

See our disclaimer.

Filed Under: Alternative Risk Transfers, Contract Formation, Reinsurance Transactions, Special Focus, Week's Best Posts

UPDATE ON CAPTIVE INQUIRIES

March 25, 2013 by Carlton Fields

We have previously posted on the NAIC’s pending inquiries into the appropriateness of the use of captives. There are two recent developments of note with respect to such issues. First, the NAIC’s subgroup which has been conducting an inquiry has exposed for public comment a revised version of its white paper titled Captives and Special Purpose Vehicles. This draft does not resolve all of the disagreements evident in prior discussions of these issues at the NAIC, calling for further study with respect to some issues. The comment period for this document ends April 29, 2013. Second, the Treasury’s Federal Insurance Office (“FIO”) has formed a task force, headed by District of Columbia Insurance Commissioner William White, to examine the national implications of the use or possible abuse of captives and special purpose vehicles by life insurance companies. This represents a new direction for the FIO, and the reason for this shift is not readily apparent. Although the FIO has been involved mostly in international issues so far, and the NAIC white paper does identify its inability to regulate offshort capitves as an issue, it is unclear whether the FIO’s interest has been prompted by international regulatory concerns.

This post written by Rollie Goss.

See our disclaimer.

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

SPECIAL FOCUS: NAIC FOCUSES ON CAPTIVES AND SPVS

December 17, 2012 by Carlton Fields

The NAIC has had a special sub-group reviewing the regulation and use of captive insurers and special purpose vehicles. John Pitblado reports in a Special Focus article on the scope and development of this review.

This post written by John Pitblado.

See our disclaimer.

Filed Under: Accounting for Reinsurance, Alternative Risk Transfers, Reinsurance Regulation, Reinsurance Transactions, Reserves, Special Focus, Week's Best Posts

  • « Go to Previous Page
  • Page 1
  • Page 2
  • Page 3
  • Page 4
  • Interim pages omitted …
  • Page 6
  • 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.