Loss portfolio transfer
The loss portfolio transfer (abbreviation LPT , from English loss for "damage", portfolio for "inventory, portfolio" and transfer for "transfer, transfer") is a way of transferring the damage portfolio from one party to another.
Properties and special features
Provisions of an insurance company, e.g. B. a captive , are transferred to a primary insurer or reinsurer against payment of a fixed amount . In the case of the captive, among other things, the conversion of variable provisions into fixed costs occurs naturally, while long-term liabilities are removed from the balance sheet . With an LPT, the captive fulfills all claims from their insurance contracts without having to continue processing the claim .
species
- Transfer of provisions (English: commutation ): The primary insurer agrees that the reinsurer, e.g. B. a captive who transfers back remaining liabilities from previous insurance years. The reinsurance contract is canceled by the commutation agreement , the primary insurer is no longer reinsured. Contractual partners are primary insurers and reinsurers.
- Innovation or debt replacement (English: Novation ): The primary insurer agrees that a new reinsurer can accept claims from previous reinsurance contracts, e.g. B. with a captive, guaranteed. With the novation agreement , the captive transfers its provisions to the new reinsurer with the consent of the primary insurer. The new reinsurer takes on the role of captive here. Contractual partners are primary insurers, old and new reinsurers.
Possible reasons for an LPT
- Preparing for a merger
- Planning a takeover or spin-off of parts of the company
- Dissolution of a part of the company
- Relocation
Practical use
In connection with Solvency II (increased capital requirements, more extensive regulatory information requirements), captives are increasingly seeing activities aimed at LPT.
literature
- Peter Liebwein: Classic and modern forms of reinsurance . VVW, Karlsruhe 2009, ISBN 978-3-89952-455-0 .
- Michael Flämig: Alternative risk transfer - an economic consideration . Dissertation, August 2007 (page 88ff, Loss Portfolio Transfer)
Web links
Individual evidence
- ^ Loss Portfolio Transfers - Exit strategy for captives . Insights - captives issue 2010 (page 12 ff.) ( Memento of the original dated December 6, 2010 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ http://www.opus-bayern.de/uni-bamberg/volltexte/2009/165/pdf/flaemigdiss.pdf
