18 November 2013Analysis

JLT’s captive gets kudos for risk and exposure controls

Isosceles Insurance Ltd, the Bermuda-domiciled captive of broker JLT Group, has been assigned a financial strength rating of B++ and an issuer credit rating of “bbb+” by A.M. Best.

The ratings recognise Isosceles’ adequate capitalisation, as well as strict risk and exposure controls in the form of security and indemnification clauses of several agreements between various key parties involved in the captive's operations which significantly isolate Isosceles from liability and insulate each cell from the others and from the general account.

According to A.M. Best: “the ratings further acknowledge the financial and operating strengths of Isosceles’ parent, JLT Group. Furthermore, the ratings consider the financial wherewithal of each individual part as well as the consolidated accounts and the underlying risks that each cell insures.”

The rating also recognises the captive’s strong reinsurance participation.

The complex captive, operating under a private act of the Bermuda legislature entitled “The Isosceles Insurance Act, 1997”, will be regularly monitored by the rating agency. The positive ratings are partially offset by the lack of a full test in court of a competent jurisdiction on the legaliyt of the walled-off structure between any two or more cells within a general accounta nd the exclusive reliance on JLT for production of all Isoceles' business.