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Multi-Beneficiary Trust Fund

Aspen Insurance UK Limited is an alien-accredited (trusteed) reinsurer recognized by 50 US states, the District of Columbia and the US Treasury Department and is also a licensed reinsurer in Puerto Rico.

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Aspen Insurance UK Limited (AIUK) first became accredited on June 30, 2003. Its accreditation status is supported by a multi-beneficiary US reinsurance trust domiciled in New York. As of December 31, 2015, invested assets in the trust equaled more than US$1 billion.

Being accredited provides security and protection to AIUK's US cedants. As a result of AIUK's accredited status, its US cedants are allowed financial statement credit for reinsurance as either an asset or a reduction from liability under US credit for reinsurance laws and regulations.

As an accredited reinsurer:

  1. AIUK is required to secure cedant liabilities with assets in a US multi beneficiary reinsurance trust up to 100 percent of cedant-estimated reinsured liabilities plus a minimum US$20 million surplus.
    • Trust liabilities must include case reserves, IBNR and net unearned premiums.
    • Trust assets are required to consist of cash, money market funds, government securities, investment grade securities and equities. Equities are not to exceed 10% of the total value of trust assets.
  2. AIUK is regulated by the trust's domiciliary regulator, the New York Department of Financial Services and the other jurisdictions where AIUK is accredited.
  3. AIUK is required to file certified financial statements for the trust on a quarterly basis on NAIC statement blanks for domestic property/casualty insurance companies in accordance with accounting practices consistently applied, prescribed and/or permitted by the New York Insurance Department.
    • The annual filing includes a certified actuarial opinion based on reserving standards prescribed by New York Insurance Regulations.

Enhanced protection and convenience for US cedants

  1. The trust fund is for the exclusive benefit of US ceding insurers.
  2. AIUK may not withdraw funds for its account from the trust without prior written approval from the New York Insurance Department.
    • Trust income may be withdrawn only when assets exceed 100% of cedants’ liability plus US$20 million.
  3. The trust must fund liabilities on a gross basis without allowance for retrocessions.
  4. In the event of AIUK's insolvency or a deficiency in the trust, the New York Insurance Department is entitled to take possession of the trust for the benefit of cedants
  5. The trustee maintains trust assets in New York.

Benefits for US cedants

  • Complies with US credit for reinsurance laws and regulations
  • Automatic financial statement credit for cedants
  • Top quality assets in a segregated trust
  • For the sole benefit of US cedants
  • Qualifies for risk limitation to surplus
  • Exclusive protection for US reserves ceded to AIUK
  • Actuarially calculated reserves in accordance with US regulations
  • Trust funded without allowance for retrocessions
  • The trust is funded from AIUK surplus and the trust assets are segregated from other AIUK obligations

 

Trust Balance Sheet

Figures as of December 31, 2015

 Assets US$mn
Bonds  925.8
Cash 8.7
Investment income due and accrued 5.4
Sub-total 939.9
Aggregate write-ins for other than invested assets 395.8
Total 1,335.7
Liabilities & Surplus  
Case Reserves 388.1
IBNR 617.6
UPR (net of aggregate write) 99.8
Total Liabilities 1,105.7
Surplus as regards policyholders 230
Total 1,335.7

For more information

Send an email to:

Stuart Riley, Group and UK Compliance Director