Capital Markets Backed Reinsurance (cat bonds, securitization, etc.
as in the USAA - Residential Re transaction)
Options (such as the PCS Option or the Guy Carpenter Option)
Company Equity Puts.
The question is how these forms of risk transfer are accounted for
(i.e., what are the accounting entries necessary to reflect the costs
associated with these forms of risk transfer)? This is from the point
of view of the primary company.
Initial investigation of the Capital Markets Backed Reinsurance approach
suggests that the accounting is the same as for traditional reinsurance
since the contract between the primary company and the Special Purpose
Vehicle is a traditional reinsurance contract. The question is how the
other two cases are handled.
Has anybody run across the latter two situations or investigated this
Visit the CAS Web Site at http://www.casact.org
To subscribe or unsubscribe from CASNET:
Send an e-mail to firstname.lastname@example.org
Type in the body join casnet to subscribe
or leave casnet to unsubscribe.