Products

Vista L&C has assembled a team of professionals with extensive underwriting and structuring skills to provide flexible, innovative reinsurance solutions that are customized to a ceding insurer’s risk and capital objectives.

 

Vista L&C provides excellent counterparty credit with the establishment of protected cells and proper trust accounts to allow the ceding insurer to take full balance sheet credit for the reinsurance ceded.

The reinsurance of closed blocks of disability claims, often referred to as a reserve buy-out, produces clear and compelling financial benefits for the ceding insurer. First, by transferring assets to the reinsurer in an amount less than the ceding insurer’s statutory reserve, permanent surplus is created. Second, the risk-based capital ratio of the ceding insurer will improve, as these assets and liabilities come off the books. Third, depending on various pricing parameters, the premium paid for the coverage may be less than the GAAP or IAS reserve held by the ceding insurer, producing a fixed stream of future income. Finally, as a risk-transfer mechanism, the ceding insurer is indemnified for fluctuations in morbidity, mortality, and interest rates.

Vista L&C is skilled at assuming closed blocks of disability claims and, in cases where the ceding insurer wishes to transfer claims administration to a third-party administrator, has successfully operated within the parameters set by the ceding insurer and administrator.

Long term care reinsurance serves to transfer morbidity, mortality, lapse, and investment risk to the reinsurer, which can result in material risk-based capital ratio improvements.  This may allow the ceding insurer to deploy newly-freed capital into new lines of business, or to make a strategic acquisition.  Vista L&C has developed a number of products to facilitate capital ratio improvements, including products where morbidity volatility is assumed by third parties.

The reinsurance of annuities, including immediate annuities, substandard annuities, and fixed deferred annuities, can result in powerful balance sheet benefits for the ceding insurer. First, by transferring assets to the reinsurer in an amount less than the ceding insurer’s statutory reserve, permanent surplus is created. Second, the risk-based capital ratio of the ceding insurer will improve, as these assets and liabilities come off the books. Third, depending on various pricing parameters, the premium paid for the coverage may be less than the GAAP or IAS reserve held by the ceding insurer, producing a fixed stream of future income. Finally, as a risk-transfer mechanism, the ceding insurer is relieved of various risks, including longevity, asset default, and interest rate risks.

In addition to its core reinsurance products, Vista L&C also provides reinsurance for life insurance and blocks of workers compensation claims, and offers liability close-out solutions for corporate captives.

Many seasoned life insurance blocks produce predictable cash flow streams that may be monetized through a reinsurance arrangement. By transferring assets to a reinsurer in an amount less than the reserve held, substantial surplus and risk transfer benefits can be achieved.

The reinsurance of portfolios of workers compensation claims can produce financial gains for the ceding insurer, including improvement of surplus and risk-based capital ratios. Additionally, the ceding insurer is relieved of certain insurance risks pertaining to the duration of the claim payout.

Corporate captives often contain a variety of insurance liabilities, many of which simply run off over a long time frame. Capital in the captive can be freed by transferring such liabilities to a reinsurer. This increases the financial flexibility of the sponsor’s risk management program.

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