Actuarial Notes

Life Reinsurance Treaty Recapture Provisions

By Actuarial Compass LLC · Society of Actuaries · 2020

Study guide: Exam CP-341

A June 2020 Society of Actuaries report, sponsored by the Reinsurance Section and the Product Development Section, and a sequel to Life Reinsurance Treaty Construction (2013). It compiles and analyzes the recapture provisions of life reinsurance treaties from the perspectives of participants gathered by questionnaire, interviews and a roundtable, and says why those provisions matter to direct writers and to reinsurers.

On the syllabus

Report Usage

1 Executive Summary

  • A recapture provision defines the obligation or an option of a cedant at a point in time or during a time period; provisions related to recapture may include changes in retention, insolvency, changes in legal control, changes in rating, changes in financial or capital ratios, and increases in premium rates.
  • 1.1.1 First Degree
  • 1.1.2 Second Degree

2 Acknowledgements

3 Introduction

4 Overview

  • 4.1 Participant Selection
  • 4.2 Questionnaire
  • 4.3 Telephone Interviews, Emails and In-Person Roundtable Discussion

5 Participant Perspectives—Treaty Provisions

  • 5.1 Background and Context
    • 5.1.1 2013 Report Themes
    • 5.1.2 2013 Report Recapture Provision Comments
  • 5.2 Changes in Retention
    • 5.2.1 Older Treaty Language
      • 5.2.1.a Participant Comments
      • 5.2.1.b Author Observations
    • 5.2.2 New Treaties
      • 5.2.2.a Participant Comments
      • 5.2.2.b Author Observations
  • 5.3 Insolvency
    • 5.3.1 Participant Comments
    • 5.3.2 Author Observations
  • 5.4 Change in Control
    • 5.4.1 Participant Comments
    • 5.4.2 Author Observations
  • 5.5 Financial Triggers
    • 5.5.1 Participant Comments
    • 5.5.2 Author Observations
  • 5.6 Rate Increases
    • 5.6.1 Participant Comments
    • 5.6.2 Author Observations
  • 5.7 Future Language
    • 5.7.1 Participant Comments
    • 5.7.2 Author Observations

Appendix A: Questionnaire and Results

Appendix B: VM-20 Impact on Reinsurance

References

Sources