Tokio Marine & Nichido Fire Insurance Co. has arranged reinsurance cover for approximately $200 million of typhoon risks by means of a securitization. Swiss Re accepted reinsurance of the risks and transferred the risks to a special purpose Cayman Islands company which issued the securities. The five year, BB+ rated securities transaction was designed and sold with the assistance of SwissRe Capital Markets Corporation.
Reinsurance Transactions
Alternative Risk Transfer portal
Artemis describes iteself as “the Alternative Risk Transfer Portal.” It contains a directory describing numerous alternative risk transfer financing transactions, and provides visitors with an oportunity to subscribe to a news feed of alternative risk transfer deals.
FASB receives comments on financial reporting bifurcation proposal
The Financial Accounting Standards Board (FASB) has now received and posted, for public viewing, 53 comments to its proposed Bifurcation of Insurance and Reinsurance Contracts for Financial Reporting. Among the organizations submitting comments are the National Association of Insurance Commissioners, the Reinsurance Association of America and the American Academy of Actuaries.
Endurance places $235 million cat bond
Endurance Specialty Insurance Ltd. (“Endurance”) has acquired $235 million of protection for California earthquake and U.S. hurricane risks, financed through a risk-linked securities program. Endurance, a unit of Bermuda-based Endurance Specialty Holdings Ltd., bought the coverage from Cayman Islands-based Shackleton Re Ltd. Shackleton Re financed the reinsurance through the issuance of a $125 million catastrophe bond and a $110 million multi-year risk-linked credit facility. Endurance’s new reinsurance program has three separate layers of coverage, including: $125 million of reinsurance to cover California earthquake risk for 18 months; $60 million of coverage for U.S. hurricanes in the North Atlantic, Gulf Coast, and certain inland regions for two years; and $50 million of reinsurance for California earthquake or U.S. hurricane losses, occurring within a year of a similar catastrophe, for two years.
Court dismisses class action Complaint against KPMG US over reinsurer audits
A District Court has dismissed the First Amended Class Action Complaint against KPMG US relating to audit reports relating to the annual financial statements of Bermuda-based Annuity & Life Re (Holdings), Ltd. The Complaint alleged that Annuity & Life Re understated its liabilities and overstated its profits and failed to comply with Generally Accepted Accounting Principles, and that KPMG failed to follow Generally Accepted Auditing Standards in its audits of the company. The Court found that the audits were performed by KPMG Bermuda, rather than KPMG US, and that KPMG US did not control the audit process or make any independent misrepresentations. Schnall v. Annuity & Life Re (Holdings) Ltd., Case No. 02-2133 (D. CT. Aug. 10, 2006).