Fortitude Re enhances reinsurance capabilities
Fortitude Re has formed a Bermudian-based multi-line reinsurer and has acquired a US life insurer.
In addition, Fortitude Re’s subsidiary Fortitude Reinsurance Company Ltd — Bermuda’s largest multi-line reinsurer — has obtained approval to operate as a reciprocal jurisdiction reinsurer, the first such approval to be granted by the Texas Department of Insurance (TDI), the company said.
As a result, Fortitude Re can now offer the flexibility to transact through multiple entities and structures to help its clients to achieve their objectives.
The development follows other recently announced transactions that introduce additional capabilities to Fortitude Re’s franchise, including the acquisition of two US-domiciled third-party administrators from American International Group Inc and the pending acquisition of Prudential Annuities Life Assurance Corporation and its in-force legacy variable annuity block from Prudential Financial Inc.
The company said Fortitude International Reinsurance Ltd (FIRL) commenced operations as a Class 4 and Class E reinsurer, licensed by the Bermuda Monetary Authority, on January 1.
FIRL will complement Fortitude Re’s other operating entities and focus on reinsurance solutions for insurers domiciled outside the US, the company said.
On January 3, Fortitude Re said, it completed its acquisition of Rx Life Insurance Company — to be renamed Fortitude U.S. Reinsurance Company — from Heritage Life Insurance Company.
The company said Fortitude Re US, which will serve as a US reinsurance platform for Fortitude Re, is an Arizona-domiciled life and annuity insurer widely licensed in the US. This acquisition will enable Fortitude Re to offer clients a US-domiciled reinsurance option.
Effective from January 1, the TDI granted FRL authority to operate as a reciprocal jurisdiction reinsurer.
The company said FRL expects to seek similar status in other selected US jurisdictions in the near future.
FRL’s reciprocal jurisdiction reinsurer status allows US ceding companies to take full statutory credit for reinsurance ceded to FRL without any regulatory prescribed collateral requirements, effectively treating FRL for these purposes as a US-domiciled reinsurer, the company said, adding that FRL is among the first reinsurers to obtain such status in the US.
James Bracken, Fortitude Re CEO, said: “The transactions and regulatory approval represent an important step in the evolution and expansion of the capabilities Fortitude Re is able to offer to clients to solve their most complex challenges.
“With the establishment of FIRL, we expect to grow our international reinsurance business in Asia and the UK and European markets.”