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Reinsurance Security Agreement
"I need a Reinsurance Security Agreement governed by Irish law for our Irish subsidiary acting as cedent, with collateral requirements set at 120% of technical provisions and quarterly valuation dates starting March 2025, including specific provisions for letters of credit as eligible collateral."
1. Parties: Identifies and defines the contracting parties - typically the reinsurer providing security and the cedent receiving security
2. Background: Contextualizes the agreement, references the underlying reinsurance arrangement, and explains the purpose of the security agreement
3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out interpretation rules
4. Security Interest Creation: Establishes the creation and nature of the security interest, including the assets being secured
5. Collateral Requirements: Specifies the type, amount, and quality of collateral required, including calculation methods and maintenance requirements
6. Custody Arrangements: Details the arrangements for holding and managing the collateral, including custodian responsibilities
7. Top-Up and Release Provisions: Sets out conditions and procedures for increasing or releasing collateral based on value fluctuations or obligation changes
8. Rights and Obligations: Details the ongoing rights and obligations of all parties regarding the security arrangement
9. Events of Default: Defines circumstances constituting default and consequences thereof
10. Enforcement: Specifies the procedures and rights for enforcing security upon default
11. Representations and Warranties: Contains standard and specific representations and warranties from each party
12. Termination: Sets out circumstances and procedures for terminating the agreement
13. Governing Law and Jurisdiction: Specifies Irish law as governing law and establishes jurisdiction for disputes
1. Multi-Currency Provisions: Required when collateral may be provided in multiple currencies, specifying exchange rate mechanisms and currency conversion procedures
2. Trust Arrangements: Needed when the security arrangement involves a trust structure, detailing the trust mechanism and trustee obligations
3. Letters of Credit: Required when letters of credit are accepted as eligible collateral, specifying requirements and procedures
4. Investment of Collateral: Needed when collateral assets may be invested, specifying permitted investments and investment procedures
5. Tax Provisions: Required for cross-border arrangements or when specific tax implications need addressing
6. Regulatory Compliance: Needed when specific regulatory requirements must be addressed, such as Solvency II compliance
7. Third Party Rights: Required when rights are granted to non-parties, such as regulators or beneficiaries
1. Schedule 1 - Underlying Reinsurance Contracts: Lists and describes the reinsurance contracts covered by the security arrangement
2. Schedule 2 - Collateral Specifications: Detailed requirements for eligible collateral, including types, ratings, and valuation methods
3. Schedule 3 - Calculation of Required Collateral Amount: Formula and methodology for calculating required collateral amounts
4. Schedule 4 - Forms of Notices: Standard forms for various notices required under the agreement
5. Schedule 5 - Custodian Agreement Terms: Key terms and requirements for any custody arrangement
6. Appendix A - Contact Details: Contact information for all relevant parties and authorized representatives
7. Appendix B - Reporting Requirements: Templates and specifications for required reporting under the agreement
Authors
Insurance
Reinsurance
Banking
Financial Services
Asset Management
Professional Services
Legal Services
Legal
Compliance
Risk Management
Treasury
Operations
Finance
Reinsurance
Regulatory Affairs
Portfolio Management
Insurance Operations
Collateral Management
Chief Risk Officer
Head of Reinsurance
Legal Counsel
Compliance Officer
Treasury Manager
Collateral Manager
Chief Financial Officer
Reinsurance Manager
Risk Manager
Operations Director
Security Trustee Officer
Regulatory Affairs Manager
Portfolio Manager
Insurance Operations Manager
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