Adding A 10 Billion Reinsurance Fund

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What will the federal government's $10 billion reinsurance pool mean for you? - ABC News

A pilot program will subsidise the cost of insurance for cyclones and related flood damage, potentially helping lower 500,000 premiums in northern Australia. Here's how it might help you.

Posted Tue 4 May 2021 at 3:56amTuesday 4 May 2021 at 3:56amTue 4 May 2021 at 3:56am, updated Tue 4 May 2021 at 4:15amTuesday 4 May 2021 at 4:15amTue 4 May 2021 at 4:15am

For over a decade Ann Greer has called her apartment at the Metro Quays home, but an insurance hike of $100,000 for the building in the past year is taking the joy out of her dream digs.

"We've just spent the whole year trying to do this piecemeal thing of getting two or three months of insurance at a time conditional of us doing certain things," she said.

"The issue has been either you don't have insurance and therefore you can't sell because no-one is going to buy a unit when there is no insurance on the building, or the levies are so high that people won't buy in," she said.

“The announcement today says nothing is going to happen until 2022. That means another cyclone season that we're going to have to live through without that pressure being brought to bear to make sure insurance premiums go down.”

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Collins doubles reinsurance funding request to $10B

Category: Reinsurance Fund

Sen. Susan Collins, R-Maine, is now requesting $10 billion over two years to establish a reinsurance fund, more than double the $4. 5 billion she originally requested for the legislation, according to The Hill.

Sen. Susan Collins, R-Maine, is now requesting $10 billion over two years to establish a reinsurance fund, more than double the $4.5 billion she originally requested for the legislation, according to The Hill.

Ms. Collins first proposed the reinsurance bill in September with Sen. Bill Nelson, D-Fla., to establish a fund that reimburses insurers for extremely high-cost patients. The hope is that these funds will keep premiums down and avoid turning ACA marketplaces into high-risk pools after the individual insurance mandate is repealed.

Senate leaders agreed to pass the reinsurance and Alexander-Murray bills to gain Ms. Collins' support for the tax bill. She believes those measures will counteract any negative effects from the individual mandate repeal included in the tax legislation.

"This plan will provide $5 billion annually for two years in seed money for states to establish invisible high-risk pools or traditional reinsurance programs," Ms. Collins said, according to The Hill. "We know from experiences in the states of Maine and Alaska that high-risk pools can help to lower premiums substantially — by an average of 20 percent."

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Brookfield Reinsurance Closes $10 Billion Reinsurance Deal

BROOKFIELD, NEWS, Oct. 11, 2021 (GLOBE NEWSWIRE) -- Brookfield A-set Management Reinsurance Partners Ltd. (“Brookfield Reinsurance”) (NYSE, TSX: BAMR)...

BROOKFIELD, NEWS, Oct. 11, 2021 (GLOBE NEWSWIRE) -- Brookfield A-set Management Reinsurance Partners Ltd. (“Brookfield Reinsurance”) (NYSE, TSX: BAMR) today announced the closing of its previously-announced transaction to reinsure up to $10 billion of annuity products issued by American Equity Investment Life Insurance Company (“AEILIC”), a subsidiary of American Equity Investment Life Holding Company (NYSE:AEL) (“AEL”). Under the agreement, Brookfield Reinsurance has reinsured a block of approximately $4 billion of in-force policies, and will reinsure up to an additional approximately $6 billion of AEILIC’s “IncomeShield” or other mutually agreed liabilities issued by AEL on a flow basis.

Brookfield Reinsurance holds an approximate 9.5% equity interest in AEL and has agreed to purchase additional shares of AEL’s common stock for up to a total equity interest of 19.9% (and not less than a 15% equity interest), subject to receipt of required regulatory approvals and satisfaction of other customary closing conditions.

Brookfield A-set Management Reinsurance Partners Ltd. (NYSE: BAMR; TSX: BAMR) operates a leading reinsurance business focused on providing capital-based and annuity solutions for insurance and reinsurance companies, and pension risk transfer products for pension plan sponsors. Each class A exchangeable share of Brookfield Reinsurance is exchangeable on a one-for-one basis with a class A limited voting share of Brookfield A-set Management Inc. (NYSE: BAM; TSX: BAM.A).

Brookfield Reinsurance is not making any offer or invitation of any kind by communication of this news release and under no circumstance is it to be construed as a prospectus or an advertisement.

This news release contains “forward-looking information” within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of the U.S. Securities Act of 1933, the U.S. Securities Exchange Act of 1934, and “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, include statements which reflect management’s expectations regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of Brookfield Reinsurance and its subsidiaries, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods. Particularly, statements about Brookfield Reinsurance’s arrangement with AEILIC to reinsure additional liabilities on a flow basis and Brookfield Reinsurance’s agreement to acquire the additional equity interest in AEL Holdco, including receipt of the required regulatory approvals, are forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “expects,” “anticipates,” “plans,” “believes,” “estimates,” “seeks,” “intends,” “targets,” “projects,” “forecasts” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” In particular, the forward-looking statements contained in this news release include statements referring to the future state of the economy or the securities market and expected future deployment of capital and financial earnings.

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Next Steps in Expanding Health Coverage and Affordability | Commonwealth Fund

The Inflation Reduction Act will keep 3.3 million people from becoming uninsured and could be a foundational step for other reforms.

Santos De Hoyos is one of many patients who are on both Medicare Advantage and Medicaid. There are a number of reform options that could be implemented to expand coverage and improve affordability now that the Inflation Reduction Act had extended the American Rescue Plan Act’s subsidies. Photo: Dennis M. Rivera Pichardo/New York Times via Redux

Issue: The Inflation Reduction Act (IRA) extended American Rescue Plan Act (ARPA) premium subsidies, which increased the generosity of health insurance tax credits to people with incomes below 400 percent of the federal poverty level (FPL) and extended eligibility for these credits to people with higher incomes. Extension of these subsidies will keep 3.3 million people from becoming uninsured, and doing so is a foundational step for other reform policies.

Goal: Analyze the impact of five policies for expanding coverage and affordability after the extension of ARPA subsidies. The five options include: 1) filling the Medicaid gap in nonexpansion states; 2) reducing the employer affordability threshold; 3) adding a $10 billion reinsurance fund; 4) increasing the federal Medicaid matching rate in expansion states; and 5) enhancing and funding marketplace cost-sharing subsidies.

Key Findings and Conclusions: Together, the five policies would cover 3.7 million more people in 2023. The proposals with the greatest impacts on coverage would involve filling the Medicaid gap and improving cost-sharing subsidies. These two options also would add the most to costs. Over a 10-year period, these five policies would increase federal spending by $606 billion and add $575 billion to the federal deficit while providing millions of uninsured people with access to affordable coverage and improving affordability for millions who are already covered.

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Suncorp, RACQ Group and other insurers question government’s premium claims for $10b North Queensland reinsurance pool

Category: 10 Billion Reinsurance

The Morrison government said its $10 billion reinsurance premium would offer big discounts for policyholders in North Queensland, but insurers aren’t so sure.

Insurers have called on the Morrison government to release the modelling that showed policyholders in North Queensland would receive a 46 per cent premium discount after the proposed introduction of its $10 billion reinsurance pool for natural disasters.

Assistant Treasurer Michael Sukkar introduced the long-awaited legislation in federal Parliament on Wednesday, but it is unclear whether there will be enough time to establish the mandatory reinsurance pool before the May election.

The Morrison government, which is hoping to create the $10 billion reinsurance pool by July, claimed it would reduce insurance premiums for 880,000 households and businesses by $2.9 billion over 10 years.

On Monday, Prime Minister Scott Morrison, Treasurer Josh Frydenberg and Mr Sukkar released a statement saying the pool would deliver a 46 per cent premium discount for individuals, a 58 per cent discount for strata properties and a 34 per cent discount for small and medium-sized businesses.

But Liberal National Party MPs in North Queensland, including Warren Entsch, have supported direct government action to bring down insurance premiums, which the Australian Competition and Consumer Commission found were almost double the rest of the country.

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National Flood Insurance Program’s Reinsurance Program | FEMA.gov

The National Flood Insurance Program (NFIP) Reinsurance Program helps FEMA manage the future exposure of the NFIP through the transfer of risk to private reinsurance companies and capital market investors. The NFIP Reinsurance Program promotes private sector participation in flood-risk management. By securing reinsurance at a fair and reasonable cost, FEMA has an additional method to fund payment of flood claims after catastrophic flood events.

Congress granted FEMA authority to secure reinsurance from the private reinsurance and capital markets through the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) and the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA).

FEMA is continuing its reinsurance program and plans to secure a new reinsurance placement in January 2023. The Reinsurance Program transfers financial flood risk to private markets to help strengthen the financial framework of the National Flood Insurance Program. This traditional reinsurance placement would be in effect from Jan. 1-Dec. 31, 2023. Read more about the Trade Agreement Announcement notice of intended reinsurance procurement and how to submit a request for participation on this informational fact sheet.

Reinsurance is an important risk management tool used by insurance companies to protect themselves from large financial losses. In other words, reinsurance is insurance for insurance companies. Insurance providers, such as the National Flood Insurance Program, pay premiums to reinsurers. In exchange, reinsurers provide coverage for losses incurred by insurance providers up to a specified amount negotiated by both parties. Similar to insurance for your home, reinsurance acts as a safety net by transferring risk to another party.

There are many different types of reinsurance. The National Flood Insurance Program (NFIP) secures “property catastrophe per occurrence excess of loss” reinsurance. The reinsurance company reimburses an insurer for a share of losses above an agreed-upon deductible. Reinsurance serves an important function as protection against losses from a natural disaster or other catastrophe.

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Reinsurance: the perfect hedge fund strategy to enhance a portfolio’s Sharpe ratio? - Hedge Think

by Donald A. Steinbrugge, CFA – Managing Partner, Agecroft Partners Reinsurance is one of the few hedge fund strategies that has almost no correlation to

Reinsurance is one of the few hedge fund strategies that has almost no correlation to the stock or bond markets and has the potential to generate high single digit to low double digit returns on average over the next 5 to 10 years, regardless of the direction of the capital markets. It is important for investors to stress test their overall portfolio for major market selloffs, because most hedge fund strategies’ correlations to the capital markets are dynamic and rise dramatically during market selloffs as we saw in the 4th quarter of 2008. Reinsurance funds provided valuable diversifications benefits during that period. This brings us to the question: what is reinsurance and how should an investor evaluate managers in this strategy?

What is reinsurance? It is important to differentiate between the a-set class and the legal structure of reinsurance. This paper will be focusing on the a-set class of reinsurance and not the legal structure. A number of hedge funds have created a reinsurance structure for their hedge fund strategy, creating a more tax efficient fund for their investment strategy. The current tax benefits are that taxes are deferred as long as they stay in the fund and gains are primarily long term capital gains. The objective is to generate returns from their core strategy, and have as little risk exposure to insurance as possible, but still keep the tax benefits. These are not the type of investments we are referring to in this paper.

The best way to understand the a-set class of reinsurance is to compare it to structured credit. Lending institutions can either hold various loans they have made on their books, such as residential and commercial mortgages, credit card receivables or bank loans, or they can sell the loans to other institutions and keep a small transaction fee for sourcing the deal. Insurance companies can do the same thing with insurance policies they underwrite. The insurance market is made up of 2 major risks which include life with approximately $2.5 billion annual premium per year and non-life $1.8 billion premium based on a Swiss Re/Sigma Global 2012 report. Non-life can further be divided into casualty and property. This paper will focus on the property reinsurance market.

When a bank sells their loans to a third party, often the interest and principal payments are broken out into various structured credit tranches, where a purchaser can elect to only purchase the specific cash flows that meet their needs. This carving up of a security concept is similar to how insurance companies carve up a basket of insurance policies. Reinsurers can elect which liabilities on which they would like to bid. For example, they might bid on a bundle of earth quake policies heavily weighted to Southern CA, where they would only be responsible for the liability after a certain dollar amount was paid out first. They could also size the risk to less than 3% of their portfolio.

How do reinsurance firms build out a portfolio? A reinsurance fund is heavily regulated and is limited to how much insurance risk they can a-sume based on the a-sets of the fund. Most of these property risk policies have relatively short lives of 1 year or less, but can range up to 2 years. The objective of any good reinsurance fund is to maximize the risk adjusted returns for their investors by building a diversified portfolio of policies based on geography and peril. In building out the portfolio, the reinsurance company should be using sophisticated analytics to identify cheap policies and construct a portfolio by a-sessing the downside risk of the policies in the portfolio based on a one in a hundred years scenario. This reliance on analytics for security selection and portfolio construction also has similarities to structured credit managers.

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Florida bills limit roof refusal by insurers, add new $2 billion reinsurance fund – Orlando Sentinel

Bills filed in the state House and Senate would create a new fund in which insurers can purchase insurance to help insulate them from risk.

Legislation proposed by Florida lawmakers for an upcoming special session to reform the state’s property insurance market would create a $2 billion reinsurance fund and prohibit insurers from automatically denying coverage to homeowners’ with older roofs.

Four bills filed late Friday in the state House and Senate would create a new fund in which insurers can purchase insurance to help insulate them from risk. The bills also would allow homeowners with roofs 15 years or older to get an inspection of their condition before insurers deny them coverage. If an inspection shows that a roof has at least five years of life remaining, insurers can’t refuse to issue a policy only based on the roof’s age under the proposed legislation.

If a roof is more than 25% damaged but already complies with the state’s 2007 building code, it would only have to be repaired instead of replaced under an exemption to the building code that the proposed legislation creates. One of the measures also would provide grants worth up to $10,000 each to retrofit homes so they are less vulnerable to hurricane damage. To qualify, properties would have to have insured values of $500,000 or less, be homesteaded, constructed before 2008 and located in areas where wind speeds from storms can exceed 140 miles per hour (225 kilometers per hours). Homeowners would get $2 from the state for every $1 they invested in mitigation efforts.

In a proclamation calling lawmakers back to Tallahassee in the upcoming week, Republican Gov. Ron DeSantis highlighted several issues that have contributed to rising insurance rates in the state, including high rates of insurance litigation that drive up premiums and massive underwriting losses for insurance companies that have resulted in insolvency or canceled policies, among other things.

Florida Chief Financial Officer Jimmy Patronis, said in an interview that the state last year accounted for 9% of all claims filed nationally but nearly 80% of all the property insurance lawsuits.

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Florida Gov. DeSantis Signs Property Insurance Legislation

Category: Billion Reinsurance Fund

May 26, 2022 · Florida Gov. Ron DeSantis on Thursday, May 26, 2022 signed into a law sweeping property insurance legislation that creates a $2 billion reinsurance fund and rewrites rules on …

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Will Ian Consume Florida Cat Fund, Forcing More Back-Breaking Reinsurance?

Category: Reinsurance Fund

While some analysts are predicting that the property insurance industry will be able to manage Hurricane Ian and its estimated $50 billion in insured

While some analysts are predicting that the property insurance industry will be able to manage Hurricane Ian and its estimated $50 billion in insured losses, a few are now warning that the storm could significantly erode the Florida Hurricane Catastrophe Fund’s surplus, which could spell trouble for carriers who may face soaring reinsurance costs next year.

“From my point of view, the risk to the system is that the FHCF is the finger holding back the dam,” Gutterman wrote this week in a blog post. “If it gets removed, most of the local insurers are going to get washed away.”

The Florida cat fund’s chief operating officer was not available to talk about Ian’s impact on the state-created reinsurance fund. But a spokesperson said the program “is in a strong financial position,” with liquid resources of more than $16 billion and a bonding capacity of $8 billion.

The fund’s reserves, bonding capacity and other factors mean that Gutterman “has no idea what he’s talking about,” said Melissa Burt DeVriese, president of Security First Insurance Co., an Ormond Beach-headquartered carrier with some 160,000 policies in force in Florida.

Others said that while the cat fund will likely survive, Ian’s massive right hook, affecting more than 2.3 million properties, by some estimates, has exposed deeper issues and will push some Florida insurers to the brink. Industry insiders are now saying that a special session of the Florida Legislature is needed soon to salvage the industry and expand the cat fund before the 2023 reinsurance renewal deadlines.

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Coalition’s $10bn scheme to curb rising insurance premiums in Queensland may not improve affordability | Insurance industry | The Guardian

Government should focus on ‘disaster mitigation rather than clean-up’ as climate change events increase, industry experts say <br>

Stranded vehicles in floodwaters in Townsville in 2019. The Morrison government has announced a billion-dollar reinsurance fund for cyclone-prone north Queensland, after the ACCC said such schemes support industry rather than improving affordability. Photograph: Andrew Rankin/AAP

In Cairns on Tuesday, the prime minister, Scott Morrison, announced a cyclone reinsurance pool for northern Australia, backed by a $10bn government guarantee, which aims to protect more than 500,000 properties.

The government will guarantee insurers won’t lose money should they offer insurance products in that area. Essentially the commonwealth is insuring the insurance companies against any huge losses if they offer disaster cover.

While the exact design of the program has not been released, it is likely to be very similar to that of the terrorism reinsurance pool, established after 9/11 to cover the risk of local terrorist attacks.

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Florida Bills Limit Roof Refusal by Insurers, Add New Fund

May 21, 2022 · ORLANDO, Fla. (AP) — Legislation proposed by Florida lawmakers for a special session in the upcoming week to reform the state's property insurance market would create a …

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DeSantis signs Florida property insurance reform package | wtsp.com

Category: Billion Reinsurance Fund

The move will create a $2 billion reinsurance fund.

TALLAHASSEE, Fla. — Florida Gov. Ron DeSantis on Thursday signed into a law sweeping property insurance legislation that creates a $2 billion reinsurance fund and rewrites rules on coverage denials and attorney fees, in a move to stabilize rising costs and insurer losses.

The signings mark an end to a special legislative session on insurance where lawmakers in the GOP-controlled statehouse approved the broad measures in three days, with little public input or expert analysis. The Legislature failed to approve insurance reforms earlier this year during their regular meeting period, which was dominated by intense partisan fights over bills on abortion, s-xual orientation and gender identity.

In the statehouse, the bills largely moved with bipartisan support, with lawmakers describing the package as a meaningful first step in repairing a market plagued by insurer insolvencies, policy cancelations and rising insurance costs.

The main point of criticism from Democrats, the minority party, was that the legislation does not do enough to grant immediate financial relief to homeowners whose premiums have increased. Republicans acknowledged it would take 12 to 18 months before prices may drop.

“I don't know what else I can do to lower my insurance,” said Roni Sterin, a real estate agent in Broward County who said her insurance costs unexpectedly jumped about $1,500 recently. “Nobody's helping us.”

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Florida bills limit roof refusal by insurers, add new fund | WLRN

Category: Billion Reinsurance Fund

May 23, 2022 · Legislation proposed by Florida lawmakers for an upcoming special session to reform the state’s property insurance market would create a $2 billion reinsurance fund and …

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Florida bills limit roof refusal by insurers, add new fund

May 21, 2022 · May 21, 2022. ORLANDO, Fla. (AP) — Legislation proposed by Florida lawmakers for an upcoming special session to reform the state’s property insurance market would create …

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Global Atlantic Announces $10 Billion Group Annuity Reinsurance ...

Aug 16, 2022 · The business Global Atlantic will reinsure currently has $10 billion in general account and separate account value. Under the terms of the agreement, Equitable Financial …

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Florida bills limit roof refusal by insurers, add new fund

Category: Billion Reinsurance Fund

May 21, 2022 · Legislation proposed by Florida lawmakers for a special session in the upcoming week to reform the state’s property insurance market would create a $2 billion reinsurance fund.

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Reinsurance as an Alternative Investment Strategy - Hedge Fund …

Sep 22, 2015 · Reinsurance is one of the few hedge fund strategies that has almost no correlation to the stock or bond markets and has the potential to generate high single digit to low double …

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