A practical guide to finite risk insurance and reinsurance

목차 (Table of Contents)

• CONTENTS
• About the Authors = ⅴ
• Preface = ⅶ
• SECTION ONE INTRODUCTION TO FINITE RISK COVERS = 1
• Chapter One Financial Insurance and Reinsurance Defined and Distinguished = 3
• Finite Risk Elements Common to Both Financial Insurance and Financial Reinsurance = 4
• 1.1 Financial Insurance = 5
• 1.2 Financial Reinsurance = 6
• 1.3 Case Study Financial Reinsurance versus Traditional Reinsurance = 7
• Structuring the Market Proposal for a Finite Risk Cover = 8
• Finite Risk Covers in Mergers and Acquisitions and Discontinued Lines = 9
• 1.4 The Five Types of Finite Risk Agreements = 11
• Chapter Two Accounting Considerations = 15
• Defining "True" Reinsurance = 16
• 2.1 Traditional Reinsurance Accounting = 17
• AICPA Statement of Position: Now Withdrawn = 18
• Types of Risk that May Be Transferred in an Insurance Contract = 18
• FAS 113: An Introduction = 19
• FAS 113: A Summary = 20
• FAS 113: An Analysis = 21
• 2.2 Accounting Standards for Recognition of Revenues and Costs = 24
• Claims-Made Policies as Retroactive in Nature = 27
• Additional Guidance To Come = 28
• EITF 93-6 = 29
• 2.3 Catastrophe Cover = 29
• (a) Summary of EITF 93-6:"Accounting for Multiple Year Retrospectively Rated Contracts by Ceding and Assuming Enterprises" = 30
• 2.4 RRCs versus Traditional Retro-Rated Covers = 35
• (a) Accounting for RRCs = 37
• (b) Accounting for Definite Term RRCs = 38
• (c) Definite Term RRCs = 38
• (d) Indefinite Term RRCs = 41
• (e) Case Study Accounting Treatment for Finite Risk Agreements-A Loss Portfolio Transfer Agreement = 46
• EITF 93-14 = 48
• Insurance Futures = 49
• Chapter Three Tax Considerations = 55
• What Is Insurance? = 56
• Deductibility of Amounts Paid as Insurance Premiums = 56
• "Incurred Loss" in Computing Taxable Income = 57
• Risk Shifting and Risk Transfer as Essential Elements of True Insurance = 58
• Retroactive Insurance Arrangements = 59
• 3.1 (April 15 1989): Whether Retroactive Arrangements Should be Treated as Insurance, at Least with Respect to Internal Revenue Code Sections Dealing With an Insurer's Taxable Income, etc = 59
• 3.2 (September 14 1989): Whether Retroactive Arrangements Permit an Insurer to Deduct "Losses Incurred" for Purposes of Computing Gross Income Under Internal Revenue Code Section 832(b)(3) = 60
• Attempts by the Federal Courts To Define Insurance and Transfer of Risk = 62
• The Potential Influence of FAS 113 on the Court's Thinking = 64
• Federal Tax Law's Reliance on NAIC Annual Report Forms = 65
• Discounting of Loss Reserves = 66
• Recharacterization of Reinsurance Agreements by the IRS = 67
• Determining the Significance of a Tax Avoidance Effect = 68
• Chapter Four Regulatory Criteria and Legal Requirements = 71
• Drafting Issues in the Area of Insurance Regulations = 71
• Finite Risk = 72
• 4.1 New York Insurance Law: Loss Portfolio Transfers(Regulation 108) = 74
• Chapter Five Financial Quota Share Agreements = 79
• A Typical Transaction Without a Financial Quota Share and With a Financial Quota Share = 80
• Pricing Techniques = 83
• Financial Quota Share Agreement-Summary = 84
• Financial Quota Share Agreement-Annotated = 85
• 5.1 Clause 1-Business Covered = 85
• 5.2 Clause 2-Territory = 85
• 5.3 Clause 3-Term and Cancellation = 85
• 5.4 Clause 4-Limit and Retention = 86
• 5.5 Clause 5-Premium and Commission = 86
• 5.6 Clause 6-Accounts and Remittances = 87
• 5.7 Clause 7-Exclusions = 87
• 5.8 Clause 8-Definitions = 87
• 5.9 Clause 9-Original Conditions Settlements = 87
• 5.10 Clause 10-Loss Notices and Settlements = 87
• 5.11 Clause 11-Extra Contractual Obligations and Excess Limits Judgments = 88
• 5.12 Clause 12-Premium and Loss Reserves = 89
• 5.13 Clause 13-Offset = 89
• 5.14 Clause 14-Access to Records = 89
• 5.15 Clause 15-Insolvency = 90
• 5.16 Clause 16-Service of Suit (applicable only to alien Reinsurers) = 91
• 5.17 Clause 17-Unauthorized Reinsurers = 92
• 5.18 Clause 18-Tax = 92
• 5.19 Clause 19-Federal Excise Tax = 93
• 5.20 Clause 20-Errors and Omissions = 93
• 5.21 Clause 21-Arbitration = 93
• Chapter Six Loss Portfolio Transfer Agreements = 95
• The Transaction = 96
• Pricing = 96
• 6.1 Loss Portfolio Transfer Case Study = 97
• Premium and Loss Methods of Accounting for Loss Portfolio Transfer = 101
• Sample Loss Portfolio Transfer Agreement Between the "Ceding Company" and the "Reinsurer" = 103
• 6.2 Clause 1-Business and Territory Covered = 104
• 6.3 Clause 2-Exclusions = 104
• 6.4 Clause 3-Reinsuring Clause = 104
• 6.5 Clause 4-Extra Contractual Obligations = 104
• 6.6 Clause 5-Excess of Original Policy Limits = 105
• 6.7 Clause 6-Net Retained Lines = 106
• 6.8 Clause 7-Term = 106
• 6.9 Clause 8-Loss Transfer Payment and Reports = 106
• 6.10 Clause 9-Loss Payments = 107
• 6.11 Clause 10-Ultimate Net Aggregate Losses = 107
• 6.12 Clause 11-Loss Settlements = 107
• 6.13 Clause 12-Currency = 108
• 6.14 Clause 13-Commutation = 108
• 6.15 Clause 14-Errors and Omissions = 108
• 6.16 Clause 15-Access to Records = 108
• 6.17 Clause 16-Insolvency = 108
• 6.18 Clause 17-Arbitration = 109
• Chapter Seven Retroactive Aggregate Excess of Loss Agreements = 113
• Case Study = 114
• Summary of Typical Provisions in a Retroactive Aggregate Excess of Loss Agreement = 114
• Type of Agreement Retroactive Aggregate Excess of Loss = 115
• Annotated Text of a Sample Retroactive Aggregate Excess of Loss Agreement = 116
• 7.1 Preamble = 116
• 7.2 Clause 1-Commencement and Termination = 116
• 7.3 Clause 2-Retention and Limit = 117
• 7.4 Clause 3-Definitions = 117
• 7.5 Clause 4-Specific Exclusions = 117
• 7.6 Clause 5-Retained Lines = 118
• 7.7 Clause 6-Ultimate Loss = 118
• 7.8 Clause 7-Reinsurance Premium = 118
• 7.9 Clause 8-Loss Settlements = 118
• 7.10 Clause 9-Salvage and Recoveries = 119
• 7.11 Clause 10-Commutation = 119
• 7.12 Clause 11-Profit Commission = 119
• 7.13 Clause 12-Insolvency = 120
• 7.14 Clause 13-Arbitration = 120
• 7.15 Clause 14-Tax Provision = 120
• 7.16 Clause 15-Currency = 120
• 7.17 Clause 16-Inspection of Records = 120
• 7.18 Clause 17-18-War Exclusion/Nuclear Exclusion = 120
• Another Annotated Example of a Retroactive Aggregate Excess of Loss Agreement = 120
• 7.19 Clause 1-Commencement and Termination = 121
• 7.20 Clause 2-Retention and Limit = 121
• 7.21 Clause 3-Definitions = 121
• 7.22 Clause 4-Retained Lines = 122
• 7.23 Clause 5-Ultimate Loss = 122
• 7.24 Clause 6-Reinsurance Premium = 123
• 7.25 Clause 7-Loss Settlements = 123
• 7.26 Clause 8-Salvage and Recoveries = 123
• 7.27 Clause 9-Commutation = 124
• 7.28 Clause 10-Profit Commission = 124
• 7.29 Clause 11-Insolvency = 124
• 7.30 Clause 12-Arbitration = 124
• 7.31 Clause 13-Tax Provision = 125
• 7.32 Clause 14-Currency = 125
• 7.33 Clause 15-Inspection of Records = 125
• 7.34 Clause 16-War Exclusion = 125
• Chapter Eight Prospective Aggregate Excess of Loss, (Spread Loss Cover) Agreements = 127
• Case Study: Prospective Aggregate versus Retroactive Aggregate Agreement = 128
• Prospective Aggregate Excess Agreement-Summary = 131
• Summary of Another Prospective Aggregate Excess of Loss Agreement = 133
• Safety-Net Agreement = 134
• Chapter Nine Time-and-Distance Policy: The Agreement of the London Market = 137
• Time-and-Distance Policy-Annotated = 138
• 9.1 Preamble = 138
• 9.2 Clause 1-Insurance Clause = 138
• 9.3 Clause 2-Ultimate Net Loss Clause = 139
• 9.4 Clause 3-Claims Payable Clause = 139
• 9.5 Clause 4-Claims Advice = 140
• 9.6 Clause 5-Outstanding Claims Advance Provision = 140
• 9.7 Clause 6-Currency Clause = 141
• 9.8 Clause 7-Premium Clause = 141
• 9.9 Clause 8-Errors and Omissions Clause = 141
• 9.10 Clause 9-Intermediary Clause = 141
• 9.11 Clause 10-Books and Documents = 141
• 9.12 Clause 11-Arbitration Clause = 142
• 9.13 Clause 12-Security Fund Clause = 143
• 9.14 Clause 13-Cancellation Refund (Clause for Time-and-Distance Agreements) = 143
• SECTION TWO FINANCIAL INSURANCE: FINITE RISK PROTECTION FOR INSUREDS, SELF-INSUREDS, AND THEIR CAPTIVES = 145
• Chapter Ten Financial Insurance Products for Corporations and Self Insured Pools and Funds = 147
• Major Characteristics of Financial Insurance = 148
• Blending Products = 151
• Sample Commutation Clause = 152
• 10.1 First Year = 152
• 10.2 End of First Year = 153
• 10.3 Second Year = 153
• 10.4 End of Second Year = 153
• 10.5 Third Year = 153
• 10.6 End of Third Year = 153
• Example of Loss Portfolio Agreement = 154
• Chapter Eleven Financial Insurance Case Studies Analyzed = 155
• SECTION THREE FINANCIAL REINSURANCE: FINITE RISK PROTECTION FOR CEDING INSURERS = 161
• Chapter Twelve Reasons for Buying Financial Reinsurance = 163
• Surplus Enhancement/Surplus Relief = 164
• Reducing the Cost of Traditional Reinsurance = 164
• Reducing Potential Exposure from Adverse Loss Reserve Development = 165
• Stabilizing the Ceding Insurance Company's Combined Ratio = 165
• Providing Protection from Losses from Uncollectible Reinsurance Recoverables = 166
• Providing Protection for an Insurance Company Retiring from a Particular Line of Business = 167
• Providing Protection for a Self-Insured Corporation Winding Down Its Claims Operation and Permitting a Captive Insurance Company To Withdraw from Writing Third-Party Business = 167
• Assisting in the Merging and Acquisition of Insurance Companies = 168
• Chapter Thirteen Blending "Traditional" and Finite Risk Coverage to Create "Blended/Integrated" Insurance = 169
• Integrating Finite Risk Covers and Traditional Insurance To Satisfy the Insurance Needs of Large Corporations: Integrated and/or Blended Insurance = 170
• Two Forms of Traditional Reinsurance and Financial Reinsurance = 172
• 13.1 Pro-Rata Form of Reinsurance = 172
• 13.2 Excess of Loss Form of Reinsurance = 174
• Case Study: Using a Blended/Integrated (Re)Insurance Program To Create a Finite Risk Liability Insurance Program for a Corporate Buyer of Insurance = 176
• Chapter Fourteen Reducing the Cost of Traditional Reinsurance = 179
• Traditional Reinsurance Products = 179
• 14.1 Pro-Rata = 180
• 14.2 Excess of Loss = 180
• Case Study: A Traditional Casualty Excess of Loss Reinsurance Program = 180
• Spread Loss Financial Reinsurance Agreement = 181
• Prospective Aggregate Agreement = 182
• Chapter Fifteen Financial Reinsurance Case Studies Analyzed = 185
• Case Study One: Surplus Enhancement Agreement = 185
• Case Study Two: Financial Reinsurance Quota Share Agreement = 188
• Case Study Three: Loss Portfolio Transfer Financial Reinsurance Agreement = 189
• Case Study Four: Prospective Aggregate Financial Reinsurance Agreement = 191
• Non-Insurers in Financial (Re)Insurance = 193
• Chapter Sixteen Financial Reinsurance Case Studies-Actual Text of Major Market Transactions = 195
• Case Study One: Aggregate Excess of Loss Reinsurance Contract Between Lincoln National Health & Casualty Insurance Company and National Reinsurance Corporation = 196
• Case Study Two: Assumption Agreement Between Federated Investors, The Standard Fire Insurance Company and Aetna Life and Casualty Company = 203
• Case Study Three: Reinsurance Agreement By and Between Centre Reinsurance Company of New York and Constellation Reinsurance Company = 205
• Case Study Four, Part A: Aggregate Excess of Loss Reinsurance Agreement Between American Re-Insurance Company and Aetna Casualty and Surety Company = 218
• Case Study Four, Part B: Aggregate Excess of Loss Retrocession Agreement Between Aetna Casualty and Surety Company and Aetna Life and Casualty Company = 237
• Case Study Four, Part C: Release and Commutation Agreement Between American Re-Insurance Company and Aetna Casualty and Surety Company Aetna Life and Casualty Company The Standard Fire Insurance Company The Automobile Insurance Company of Hartford Connecticut Aetna Casualty and Surety Company of Illinois, and Aetna Lloyd's of Texas Insurance Company = 239
• Case Study Four, Part D: Cut-Through Endorsement to the Aggregate Excess of Loss Reinsurance Agreement Between American Re-Insurance Company and Aetna Casualty and Surety Company = 243
• Case Study Five: Reinsurance Agreement Between Transamerica Insurance Company and ARC Reinsurance Corporation = 246
• Case Study Six: Asset Purchase Agreement By and Among Vik Brothers Insurance, Inc., American Reliance Group, Inc., American Reliance Insurance Company and American Reliance Casualty Company = 264
• Exhibit A: Assumption Reinsurance Agreement-American Reliance Insurance Company, American Reliance Casualty Company, State Capital Insurance Company and LMI Insurance Company = 319
• Exhibit B: Binders for Quota Share Treaty and Excess of Loss Property Treaties and Portfolio Transfer = 328
• Appendix Using Financial Reinsurance in a Leveraged Property-Casualty Insurance Company Acquisition = 331
• Index = 339