Enstar creates Cayman insurer following Maiden deal

Enstar is creating a Cayman Islands-licensed insurance company (the Retrocessionaire) as a subsidiary of the group following the retrocession deal with Maiden Holdings.

Maiden Reinsurance (Maiden Bermuda), a wholly-owned subsidiaries of Bermuda-based Maiden Holdings has entered a retrocession agreement with Enstar Group related to quota share reinsurance contracts with AmTrust Financial Services.

As part of the deal, Enstar will assume loss reserves of approximately $2.68 billion associated with quota share reinsurance contracts that Maiden Bermuda has with AmTrust Financial Services. The retrocession will apply to losses arising and/or claims made on or prior to June 30, 2018, and loss reserves assumed will be subject to adjustment for paid losses since such date.

Under the agreement, the Retrocessionaire, Maiden Insurance, and a trustee will enter into a trust agreement pursuant to which the trustee will hold certain assets as security for the satisfaction of the obligations of the Retrocessionaire to Maiden Insurance under the Retrocession Agreement, according to a corporate statement.

Maiden and the Retrocessionaire will also seek to amend the terms of the existing trust agreements related to the underlying reinsurance agreements, to create sub-accounts with respect to the losses to be reinsured pursuant to the Retrocession Agreement and to grant the company and its affiliates investment control over such sub-accounts, which will be managed pursuant to agreed investment guidelines.

The transaction is expected to close in the first quarter of 2019.

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