6 July 2016USA analysis

RGA completes captive reinsurance agreement

Reinsurance Group of America (RGA) has completed a transaction with an unnamed life insurance company to provide VM20, a principle-based reserving instrument, for a block of term life insurance.

According to RGA, the captive reinsurance agreement is one of the first of such transactions in compliance with Actuarial Guideline 48 (AG 48), adopted by the National Association of Insurance Commissioners (NAIC), through which the NAIC defined rules to be followed for life reserve financing transactions completed after January 1, 2015.

Primary assets in this transaction originate from an affiliate of RGA, rather than from the direct insurer, in a manner that is consistent with the regulatory intent of AG 48. Other details of the transaction are not being disclosed.

“We believe this transaction marks the first AG 48-compliant captive reinsurance transaction featuring primary assets from a source other than the direct writer,” said Gary Seifert, senior vice president at RGA.

“Our global financial solutions team worked closely with our client to find the most beneficial solution within the AG 48 framework. It is the latest example of RGA’s expertise in helping our clients meet evolving regulatory requirements in the US and every other market we serve.”