NU Online News Service, Jan. 2, 1:01 p.m. – Annuity and Life Re (Holdings) Ltd., Hamilton, Bermuda, says a subsidiary has transferred responsibility for $25 billion of the $150 billion of life insurance and annuity reinsurance it has sold to a unit of XL Capital Ltd., Hamilton.
Annuity and Life transferred four blocks to the XL unit through a 50% quota share reinsurance contract and a fifth block through another contract.
XL will get an extra $5 million payment if, during the next 18 months, Annuity and Life gets at least $35 million in new capital funding and its stock starts selling for more than $5 per share, Annuity and Life says.
Annuity and Life transferred the blocks to cope with its reinsurance customers’ collateral requirements. The customers’ contracts called for the company to post an additional $210 million in capital by Dec. 31, 2002, according to a financial statement the company filed with the U.S. Securities and Exchange Commission.
Annuity and Life is still negotiating with one ceding customer about a requirement that it post $50 million in additional capital, the company says.