Insurance-Linked Securities

The firm's attorneys have "been instrumental in developing alternative insurance products such as catastrophe bonds and the securitization of Triple X reserves." - Legal 500

Cadwalader lawyers have been involved in many of the most high-profile and innovative capital markets transactions for insurance and reinsurance. In addition to insurers and reinsurers, we represent banks, hedge funds, private equity funds, underwriters, credit enhancers, selling security holders, and their financial advisors in developing transactions and products tailored to the insurance and reinsurance industry that help disintermediate risk, and improve asset and liability management within the confines of insurance regulation.

These include alternative insurance products such as catastrophe bonds, industry loss warranties, sidecars, extreme mortality bonds, embedded value securitizations, life settlement funds/securitizations, premium finance programs, life/annuity arbitrage securitizations, synthetic securitizations, and securitization of Triple X reserves and other assets. Our lawyers also structure insurance policies and reinsurance contracts to embed capital markets components.

Our lawyers have worked on many innovative catastrophe and extreme mortality bond structures, including single, multi-peril, and second event bonds, indemnity, modeled loss, indexed and parametric loss transactions, reinsurance, and retrocessional and counterparty agreement coverage. Cadwalader has also played a significant role in the emergence of the sidecar, another capital markets response to times of capacity constraints in the traditional property catastrophe reinsurance market. These transactions typically involve the formation of a special purpose reinsurer to provide short-term reinsurance coverage for specified lines of business written by a particular insurer or reinsurer.

We also work with insurance companies to develop innovative customized products for sale to pension plans and other institutional investors, and advise on tax-advantaged insurance and insurance-related financial investments. Cadwalader is at the forefront of developing innovative capital markets instruments on behalf of property and casualty insurers that have municipal bond holdings and tax loss or alternative minimum tax positions. In addition, we work with insurance companies to develop capital markets instruments to finance large municipal bond portfolios on a leveraged tax-exempt basis.

Cadwalader has also represented monoline financial guaranty insurers in transactions in which they provide financial guaranty insurance in their traditional business and in contingent capital transactions (including Triple X). Financial guarantee insureds look to Cadwalader for advice as to compliance with applicable financial guaranty insurance laws and to assist with workouts and troubled situations.

  • Tramline Re II Ltd. June 2013 Represented the Initial Purchaser (Aon Benfield Securities Inc.) in the issuance and sale of $75 million Series 2013-1 Class A Principal At-Risk Variable Rate Notes providing to sponsor Amlin AG coverage for U.S. earthquake, and Canada earthquake risk based on PCS index triggers.
  • Ibis Re II Ltd. June 2013 and January 2012. Represented the Initial Purchasers (Aon Benfield Securities Inc., Swiss Re Capital Markets Corporation and Goldman, Sachs & Co.) in the establishment of a program for the issuance of notes, including an initial issuance and sale of $130 million of notes and a subsequent issuance and sale of $185 million of notes, providing coverage to American Security Insurance Company, American Bankers Insurance Company of Florida and Standard Guaranty Insurance Company for U.S. hurricane risk through a PCS index trigger.
  • Residential Reinsurance 2013 Limited May 2013 Represented the Initial Purchasers (Goldman, Sachs & Co., Swiss Re Capital Markets Corporation and Deutsche Bank Securities Inc.) in the issuance and sale of $300 million Series 2013-I Principal At-Risk Variable Rate Notes to provide indemnity coverage under a reinsurance agreement with the United States Automobile Association providing coverage for U.S. hurricane, earthquake, thunderstorm, winter storm and wildlife risks.
  • Long Point Re III Ltd. May 2013 and June 2012. Represented the Sponsor (The Travelers Indemnity Company and its affiliates) and the Issuer in the establishment of a program for the issuance of notes, including an initial issuance and sale of $250 million of notes and a subsequent issuance and sale of $300 million of notes to provide indemnity coverage under a reinsurance agreement with the Sponsor providing coverage for Mexico hurricane and earthquake.
  • Pelican Re Ltd. May 2013 Represented the Sponsor (Louisiana Citizens Property Insurance Corporation) and the Issuer in the issuance and sale of $140 million Series 2013-1 Class A Principal At-Risk Variable Rate Notes to provide indemnity coverage under a reinsurance agreement with the Louisiana Citizens Property Insurance Corporation providing coverage for Louisiana hurricane risk.
  • Tar Heel Re Ltd. April 2013 Represented the Initial Purchasers (GC Securities and Munich Re Capital Markets GmbH) in the establishment of a program for the issuance of notes, including an initial issuance and sale of $500 million Series 2013-1 Class A Principal At-Risk Variable to provide indemnity coverage under a reinsurance agreement with the North Carolina Insurance Underwriting Association and the North Carolina Joint Underwriting Association providing coverage for North Carolina hurricane risk.
  • Vitality Re IV Ltd. January 2013. Represented the Initial Purchasers (Goldman, Sachs & Co. and BNP Paribas) in the establishment of a program for the issuance of notes, including an initial issuance and sale of $150 million Series 2013-I Principal At-Risk Variable Rate Notes to provide indemnity coverage under a reinsurance agreement with the Sponsor providing coverage for excess medical benefits exposure.
  • Atlas Reinsurance VII Limited. November 2012. Represented the Initial Purchasers (Aon Benfield Securities Inc., BNP Paribas and Natixis) in the issuance and sale by an Irish special purpose reinsurance vehicle of: (i) $60,000,000 Class A Principal-at-Risk Variable Rate Notes providing to sponsor SCOR Global P&C SE coverage for U.S. earthquake and U.S. hurricane risk and European windstorm based on PCS index triggers and (ii) €130,000,000 Series Class B Principal-at-Risk Variable Rate Notes providing to sponsor SCOR Global P&C SE coverage for Europe windstorm risk based on a PERILS index trigger.
  • Tramline Re II Ltd. June 2013 Represented the Initial Purchaser (Aon Benfield Securities Inc.) in the issuance and sale of $140 million Series 2013-1 Class A Principal At-Risk Variable Rate Notes to provide indemnity coverage under a reinsurance agreement with the Louisiana Citizens Property Insurance Corporation providing coverage for Louisiana hurricane risk.
  • Residential Reinsurance 2012 Limited November 2012. Represented the Initial Purchasers (Goldman, Sachs & Co., Swiss Re Capital Markets Corporation and Deutsche Bank Securities Inc.) in a program for the issuance of notes, including an initial issuance and sale of $400 million Series 2012-II Principal At-Risk Variable Rate Notes to provide indemnity coverage under a reinsurance agreement with the United States Automobile Association providing coverage for U.S. hurricane, earthquake, thunderstorm, winter storm and wildlife risks.
  • MultiCat Mexico Ltd. October 2012. Represented the Sponsor (The World Bank) and the Issuer in the establishment of a program for the issuance of notes, including an initial issuance and sale of $315 million Series 2012-I Principal At-Risk Variable Rate Notes to provide indemnity coverage under a reinsurance agreement with the Sponsor providing coverage for U.S. hurricane.
  • Residential Reinsurance 2012 Limited. May 2012. Represented the Initial Purchasers (Goldman, Sachs & Co., Swiss Re Capital Markets Corporation and Deutsche Bank Securities Inc.) in a program for the issuance of notes, including an initial issuance and sale of $200 million Series 2012-I Principal At-Risk Variable Rate Notes to provide indemnity coverage under a reinsurance agreement with the United States Automobile Association providing coverage for U.S. hurricane, earthquake, thunderstorm, winter storm and wildlife risks.
  • Akibare II Ltd. April 2012. Represented the Counterparty (Swiss Reinsurance Company Ltd.) and the Issuer in the establishment of a program for the issuance of notes, including an initial issuance and sale of $130 million of notes covering Japan typhoon losses under a counterparty agreement in support of a reinsurance agreement between the Counterparty and Mitsui Sumitomo Insurance Co., Ltd.
  • Pelican Re Ltd. April 2012 Represented the Sponsor (Louisiana Citizens Property Insurance Corporation) and the Issuer in the establishment of a program for the issuance of notes, including an initial issuance and sale of $96 million of notes to provide indemnity coverage under a reinsurance agreement with the Louisiana Citizens Property Insurance Corporation providing coverage for Louisiana hurricane risk.
  • East Lane V Ltd. March 2012. Represented the Initial Purchasers (Deutsche Bank Securities Inc., Goldman, Sachs & Co., Citigroup Global Markets Inc., Willis Securities, Inc. and GC Securities) in a program for the issuance of notes, including an initial issuance and sale of $150 million of notes, to provide indemnity coverage under a reinsurance agreement with The Chubb Corporation providing coverage for U.S. hurricane and severe thunderstorm risks.
  • Queen Street V Re Limited February 2012. Represented the Initial Purchasers (Munich Re Capital Markets GmbH and GC Securities, a division of MMC Securities Corp.) in the issuance and sale of $75 million of notes, providing coverage to Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München for U.S. hurricane and European windstorm risks through PCS and PERILS index triggers.
  • Vitality Re III Limited January 2012. Represented the Initial Purchasers (Goldman, Sachs & Co. and BNP Paribas Securities Corp.) in a program for the issuance of notes, including an initial issuance and sale of $150 million of notes to provide indemnity coverage under a reinsurance agreement with Aetna Life Insurance Company providing coverage for excess medical benefits exposure risk.
  • Loma Reinsurance Ltd. December 2011 and June 2011. Represented the Initial Purchasers (Goldman, Sachs & Co. and Deutsche Bank Securities Inc.) in the establishment of a program for the issuance of notes, including an initial issuance and sale of $100,000,000 Series 2011-1, Class A Principal-at-Risk Variable Rate Notes and a subsequent issuance and sale of $100,000,000 Series 2011-2 Class A Principal-at-Risk Variable Rate Notes, providing coverage to Argo Re, Ltd. for U.S. hurricane and earthquake risks through a PCS index trigger, European windstorm risk through a PERILS index, and Japanese earthquake risk based on modeled loss.
  • Tramline Re Ltd. December 2011. Represented the Initial Purchaser (Aon Benfield Securities Inc.) in the establishment of a program for the issuance of variable Rate Notes, including an initial issuance and sale of $150,000,000 Series 2011-1, Class A Principal-at-Risk Variable Rate Notes providing to sponsor Amlin AG three year coverage for U.S. earthquake, U.S. hurricane and Europe windstorm risk based on PCS and PERILS index triggers.
  • Atlas VI Capital Limited. December 2011. Represented the Initial Purchasers (Aon Benfield Securities Inc. and Natixis) in the issuance and sale of: (i) $270,000,000 Series 2011-1, Class A and Class B Principal-at-Risk Variable Rate Notes providing to sponsor SCOR Global P&C SE three year coverage for U.S. earthquake and U.S. hurricane risk based on PCS index triggers and (ii) €50,000,000 Series 2011-2, Class A Principal-at-Risk Variable Rate Notes providing to sponsor SCOR Global P&C SE three year and three month coverage for Europe windstorm risk based on a PERILS index trigger, in each case under the Atlas VI Capital Limited program.
  • Golden State Re Ltd. December 2011. Represented the Sponsor (California State Compensation Insurance Fund) and the Issuer in the establishment of a program for the issuance of notes, including the initial issuance and sale of $200,000,000 Series 2011-1, Class A Principal-at-Risk Variable Rate Notes providing three year coverage for workers compensation claims resulting from California earthquakes based on a modeled loss trigger.
  • Residential Reinsurance 2011 Limited. November 2011 and May 2011. Represented the Initial Purchasers (Goldman, Sachs & Co., Swiss Re Capital Markets Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated) in a program for the issuance of notes, including an initial issuance and sale of $250,000,000 Series 2011-1, Principal-at-Risk Variable Rate Notes, and a subsequent issuance and sale of $150,000,000 Series 2011-2, Principal-at-Risk Variable Rate Notes, in each case to provide indemnity coverage under a reinsurance agreement with the United States Automobile Association providing coverage for U.S. thunderstorm, windstorm and wildlife risks.
  • Vita Capital IV Ltd. August 2011, October 2010 and May 2010. Represented the Sponsor (Swiss Reinsurance Company Ltd.), the Issuer and the Initial Purchaser (Swiss Re Capital Markets) in the establishment of a program for the issuance of notes, including an initial issuance and sale of $50 million of notes, a second issuance and sale of $175 million of notes, and a third issuance and sale of $180 million of notes, to provide extreme mortality coverage based on a parametric index trigger.
  • Oak Leaf Re Ltd. July 2011. Represented the Sponsor (Towers Watson Capital Markets Inc.) and the Issuer in a program for the issuance of notes in a Cat Bond Lite format, including an initial issuance and sale of $11.95 million of notes, to provide indemnity coverage under a reinsurance agreement with the Sponsor providing coverage for U.S. windstorm, hail, tornado, hurricane, cyclone, riot and earthquake risks.
  • Johnston Re Ltd. May 2011 and May 2010. Represented the Sponsor (Munich Re America) and Issuer in a program for the issuance of notes, including an initial issuance and sale of $305 million of notes and a subsequent issuance and sale of $201.84 million of notes, to provide indemnity coverage under a reinsurance agreement with the North Carolina Insurance Underwriting Association and the North Carolina Joint Underwriting Association providing coverage for North Carolina hurricane risk.
  • Vitality Re Ltd. April 2011 and December 2010. Represented the Initial Purchaser (Goldman, Sachs & Co.) in a program for the issuance of notes, including an initial issuance and sale of $150 million of notes and a subsequent issuance and sale of $150 million of notes, to provide indemnity coverage under a reinsurance agreement with Aetna Life Insurance Company providing coverage for excess medical benefits exposure risk.
  • East Lane IV Ltd. March 2011. Represented the Initial Purchasers (Goldman, Sachs & Co., Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Willis Securities, Inc. and GC Securities) in a program for the issuance of notes, including an initial issuance and sale of $475 million of notes, to provide indemnity coverage under a reinsurance agreement with The Chubb Corporation providing coverage for U.S. hurricane, earthquake, thunderstorm and windstorm risks.
  • Foundation Re III Ltd. February 2011 and January 2010. Represented the Initial Purchasers (Goldman, Sachs & Co. and GC Securities) in a program for the issuance of notes, including an initial issuance and sale of $180 million of notes and a subsequent issuance and sale of $135 million of notes, providing coverage to the Hartford Fire Insurance Company for U.S. hurricane risk through a PCS index trigger.
  • Montana Re Ltd. December 2010. Represented the Initial Purchaser (GC Securities) in a program for the issuance of notes, including an initial issuance and sale of $210 million of notes, providing coverage to Flagstone Reassurance Suisse SA for U.S. hurricane and earthquake coverage risk through a Paradex index trigger.
  • Shore Re Ltd. July 2010. Represented the Sponsor (Munich Reinsurance America) and the Issuer in the establishment of a program for the issuance of notes, including an initial issuance and sale of $96 million of notes to provide indemnity coverage for a reinsurance policy written to Massachusetts Property Insurance Underwriting Association providing hurricane cover.
  • Residential Reinsurance 2010 Limited. May 2010. Represented the Initial Purchasers (Goldman, Sachs & Co., BNP Paribas, and AON Benfield Securities) in a program for the issuance of $405 million notes providing coverage to the United States Automobile Association for U.S. thunderstorm, windstorm and wildlife risk based on a parametric index trigger.
  • Caelus Re II Limited. May 2010. Represented the Initial Purchasers (Goldman, Sachs & Co., Aon Benfield Securities, Bank of America, and UBS) in the establishment of a program for the issuance of notes, including an initial issuance and sale of $185 million of notes, to provide indemnity coverage for U.S. hurricane and earthquake risk to the Nationwide group of insurance companies under a portfolio of insurance.
  • EOS Wind Limited. May 2010. Represented the Initial Purchasers (GC Securities ad Munich Re Capital Markets) in the establishment of a program for the issuance of notes, including an initial issuance and sale of $80 million of notes, providing coverage to Munich Re for U.S. hurricane and European windstorm risk through a PCS index trigger and a Paradex-EUWS index trigger.
  • Ibis Re Ltd. April 2010. Represented the Initial Purchasers (Goldman, Sachs & Co., and Aon Benfield) in the establishment of a program for the issuance of notes, including an initial issuance and sale of $150 million of notes, providing coverage to American Security Insurance Company, American Bankers Insurance Company of Florida and Standard Guaranty Insurance Company for U.S. hurricane risk through a PCS index trigger.
  • Foundation Re III Ltd. January 2010. Represented the Initial Purchasers (Goldman, Sachs & Co. and GC Securities) in the establishment of a program for the issuance of notes, including an initial issuance and sale of $180 million of notes, providing coverage to the Hartford Fire Insurance Company for U.S. hurricane risk through a PCS index trigger.

NEWS

Recognition

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RESOURCES

Books

  • The Handbook of Insurance-Linked Securities

    The Handbook of Insurance-Linked Securities provides information on a type of securities, which, by combining elements of insurance and capital markets, provide an alternative channel for transferring risk and raising capital.

7 Attorneys

Bell, Suzanne Special Counsel London
T. +44 (0) 20 7170 8549
Cannon, Robert Special Counsel London
T. +44 (0) 20 7170 8735
Feig, Matthew Special Counsel New York
T. +1 212 504 6776
Polverino, Frank Partner New York
T. +1 212 504 6820
Schacter, Ira J. Partner New York
T. +1 212 504 6035
Wattman, Malcolm P. Consulting Attorney New York
T. +1 212 504 6222
Weidner, Neil J. Partner New York
T. +1 212 504 6065

Contact(s)

Matthew Feig
+1 212 504 6776 
matthew.feig@cwt.com
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Frank Polverino
+1 212 504 6820 
frank.polverino@cwt.com
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