Bob Garofalo, lead author and senior credit officer at Moody’s Ratings, noted, “The overall movement of business offshore is a net credit negative for the life insurance sector because of increased counterparty risk, less international recognition and less transparent financial regulation compared with businesses that resides onshore in the US, as well as a lack of transparency around financial assumptions and disclosure on the reinsured business.”
Moody’s assesses the credit impact of companies ceding offshore by evaluating the specifics of a treaty and the strength of the affiliated or non-affiliated counterparty. An important part of this analysis is understanding the materiality of exposure to different counterparties, some of which may be weaker than the cedent.
Moody’s stated, “Cayman Islands will need to receive recognition from other regulatory regimes before it can become a major destination for the US life industry, something we believe CIMA is focused on achieving over the long run.”
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Publish date : 2024-09-09 02:30:00
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