U.S. actuaries — the people who make the math inside life insurance policies and annuity contracts work — have developed a new guide to the reinsurance systems in countries outside the United States.
Reinsurance is insurance for insurance companies. Insurance companies use it to protect themselves against catastrophic risk, but they also use it to restructure lines of business or change the characteristics of lines of business.
In recent years, many insurers have started using reinsurance from outside the United States to make their annuity operations more efficient.
A group at the Society of Actuaries prepared the guide to help members understand how reinsurance in different non-U.S. jurisdictions works.
The guide includes Bermuda, which has been deemed by the National Association of Insurance Commissioners to have a regulatory environment roughly equivalent to the U.S. environment, and markets such as Barbados, Guernsey, Hong Kong, Ireland and the Cayman Islands.
The Cayman Islands reinsurance market has been coming up in the news more often in recent years, partly because Marc Rowan, the chief executive officer of Apollo Global Management, has suggested that some annuity issuers use reinsurance from the Cayman Islands because it requires lower levels of capital than other jurisdictions.
For five things the SOA team said about the Cayman Islands, see the gallery accompanying this article.
Credit: Ramunas Bruzas/Shutterstock
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