Scottish Re Group Ltd. says it has completed 2 deals that will provide about $2 billion in collateral.[@@]
The collateral will fund statutory reserves associated with term life policies that Scottish Re, Hamilton, Bermuda, assumed about a year ago when it acquired a large individual life reinsurance business from ING Re, Minneapolis, a unit of ING Groep N.V., Amsterdam.
The deals, with HSBC Bank USA, New York, and an unnamed reinsurer, will help finance about 40% of the “Triple-X” reserves associated with the ING Re term life block, according to Scottish Re President Scott Willkomm.
The HSBC Bank deal set up a 20-year, $1 billion collateral finance facility, and the reinsurance deal set up a $1 billion, “long-term reinsurance facility,” Scottish Re says.
Scottish Re says it will report the facilities as liabilities under the heading “collateral finance facility liabilities” in its financial statements.