Life Insurance Securitization
- NAIC - Special Purpose Reinsurance Vehicle Model Act - 789-1 - 34p
- Section 1. Purpose - This Act provides for the creation of Special Purpose Reinsurance Vehicles (“SPRVs”) exclusively to facilitate the securitization of one or more ceding insurers’ risk as a means of accessing alternative sources of capital and achieving the benefits of securitization.
- Section 5. Limited Purpose of SPRV - The chair asked whether the model should allow SPRVs to be used for other than catastrophic risks noting that this was a suggestion in the scholarly paper received by the working group.
- A regulator stated that he believed the working group should take baby steps and that it should therefore focus on catastrophic risk only to begin with. He did not feel comfortable voting for a model that allowed unlimited types of SPRVs. He also noted that tail risk and the issue of multiple cedents were also major problems that needed to be solved.
- A commissioner stated that it would be a mistake to focus solely on catastrophic risks. He noted that the earliest securitization deal was a life insurance securitization as has been the case with some of the more recent securitizations.
- 2001 Proc. 1st Quarter 399.