1、March 2020 SIDLEY GLOBAL INSURANCE REVIEW Attorney Advertising - Sidley Austin LLP, One South Dearborn, Chicago, IL 60603. +1 312 853 7000. Sidley and Sidley Austin refer to Sidley Austin LLP and affiliated partnerships as explained at disclaimer. Prior results do not guarantee a similar outcome. MN

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7、nouchi Building 23F 4-1, Marunouchi 2-chome Chiyoda-Ku, Tokyo 100-6323 +81 3 3218 5900 WASHINGTON, D.C. 1501 K Street N.W. Washington, D.C. 20005 +1 202 736 8000 i SIDLEY GLOBAL INSURANCE REVIEW SIDLEY GLOBAL INSURANCE REVIEW March 2020 The insurance industry is global in nature. Insurers and reinsu

8、rers are critically important to the world economy, assuming and transferring risk across each continent and serving as an enormous investor base for the worlds capital markets. Risk generated in one part of the world is distributed immediately across multiple markets to traditional and new market e

9、ntrants alike insurers, reinsurers, private equity sponsors, capital market investors and others. Regulatory issues arising in one market may influence the way in which similar regulatory concerns are addressed in other markets; the insurance industry constantly evolves and requires regulatory regim

10、es and market participants to adapt on a frequent basis. For a full understanding of the insurance industry, it is essential to have a grasp of the global trends and developments that bear upon that industry. We prepared the Sidley Global Insurance Review as a tool to assist readers in obtaining suc

11、h an understanding. This publication provides an overview of major legal and market developments in the global insurance industry over the past year, with a focus on the United States, United Kingdom, European Union, Asia and other markets with significant insurance industry activity, such as Bermud

12、a. This review was prepared on the cusp of the novel coronavirus (COVID-19) pandemic, which of course is continuing to affect the global insurance industry in a multitude of unique ways. All stakeholders in the insurance industry, be they carriers, producers, or consumers, are affected by this globa

13、l public health crisis and its economic consequences in ways that are hard to predict. Given the rapidly evolving issues associated with the pandemic, we think it premature to make any meaningful assessment or forecast of the impact of COVID-19 on the insurance industry. That said, the insights and

14、analysis presented in this review should be viewed through the prism of the challenges and uncertainties posed by COVID-19, which by all measures appear significant. Sidley Austin LLP has organized a multidisciplinary task force to address the wide range of regulatory, transactional and litigation i

15、ssues companies face in responding to the COVID-19 outbreak. We have established a COVID-19 Resource Center covering a variety of pertinent topics, available at and will continue to share periodic briefings with our clients and friends. To assist stakeholders in the insurance industry, we have assem

16、bled a compendium of materials issued by the NAIC and U.S. state insurance departments in response to COVID-19, available at and will continue to periodically update this compendium. This review has been produced by Sidleys Insurance and Financial Services group. Sidley is one of the worlds premier

17、law firms, with over 2,000 lawyers across 20 offices in North America, Europe and Asia Pacific. Sidley is one of only a few internationally recognized law firms to have a substantial, multidisciplinary practice devoted to the insurance industry. We have more than 85 lawyers devoted to providing both

18、 transactional and dispute resolution services to the insurance industry throughout the world. Our Insurance and Financial Services group has an intimate knowledge of, and appreciation for, the insurance industry and its unique issues and challenges. Regular clients include many of the largest insur

19、ance and reinsurance companies, their investors and capital providers, brokers, banks, investment banking firms and regulatory agencies for which we provide regulatory, corporate, capital markets, securities, mergers and acquisitions, private equity, insurance-linked securities, derivatives, tax, re

20、insurance dispute, class action defense, insolvency and other transactional and litigation services. We hope you find the 2020 edition of the Sidley Global Insurance Review to be a valuable tool in navigating the insurance market. Attorney Advertising - Sidley Austin LLP, One South Dearborn, Chicago

21、, IL 60603. +1 312 853 7000. Sidley and Sidley Austin refer to Sidley Austin LLP and affiliated partnerships as explained at Prior results do not guarantee a similar outcome. Some photos on this brochure may be of actors and not of clients or firm personnel. This Global Insurance Review has been pre

22、pared by Sidley Austin LLP for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Readers should not act upon this without seeking professional counsel. 2020 Sidley Aust

23、in LLP and Affiliated Partnerships (the “firm”). All rights reserved. The firm claims a copyright in all proprietary and copyrightable text in this report. ii SIDLEY GLOBAL INSURANCE REVIEW TABLE OF CONTENTS I. The Global Mergers and Acquisitions Market . . . . . . . . . . . . . . . . . . . . . . .

24、. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 A. North American Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25、. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. Trends in Insurance M however, relatively few of these resulted in concluded transactions, and none of those that did sign were of the scale of the headline transactions of 2018. 2. Lloyds

26、Historically, many Lloyds M Reinsurance Market Outlook, Aon Benfield (January 2020). 8 Weather, Climate Reinsurance Market Outlook, Aon Benfield (January 2020). 9 ILS capacity constraints continue, but not for everyone, February 3, 2020, Artemis. 10 See http:/www.artemis.bm/reinsurance-sidecars for

27、full list. 15 SIDLEY GLOBAL INSURANCE REVIEW ways in which the SPI structure has been utilized to include transactions for which it was not originally intended. According to the BMA, this new class will support collateralized reinsurance in a more flexible and appropriately regulated manner. Other j

28、urisdictions are also attracting ILS investors and taking steps to create further market opportunities. Five of the 29 privately placed issuances in 2019 were issued by Cayman Islands-domiciled SPIs and two were issued by Irish SPIs. With the establishment of a new regulatory regime in December 2017

29、 (as described in more detail below in section II.C), the UK ILS market continued to grow in 2019 with two ILS transactions issued by UK-domiciled SPIs. In its continuing bid to become an ILS domicile for the Asian region and beyond, the Monetary Authority of Singapore (“MAS”) introduced a new initi

30、ative to attract issuers and catalyze the ILS market in Singapore. In January 2018, MAS introduced an ILS grant scheme, which offers to fund up to 100% of the upfront issuance costs of an ILS bond issuance out of Singapore. Qualifying issuers may be first-time issuers or non-bank financial instituti

31、ons with an Asian nexus. Since the introduction, several catastrophe bonds have been issued out of Singapore. The Philippines government has also taken steps to expand the role of insurance and reinsurance markets in addressing the catastrophe risk facing the country. The Insurance Commission of the

32、 Philippines entered into a Memorandum of Understanding with the Philippine Insurers and Reinsurers Association and reinsurer National Reinsurance Corp. of the Philippines (“NatRe”) to establish a catastrophe risk pooling facility that would pool catastrophe risk and cede it to NatRe, as well as pot

33、entially the global property reinsurance markets. In the U.S., in May 2019, the California Senate passed California Bill SB 290, which would allow the California Office of Emergency Services to work with the California treasurer and the California insurance commissioner to purchase insurance, reinsu

34、rance and other related alternative risk transfer products. The bill received unanimous support from the key Assembly Insurance Committee. However, in August 2019, the bill stalled as the Department of Finance of California and a consumer organization raised objections to the way the bill exempts th

35、e purchase of such insurance and financial products from normal state oversight. The bill was pulled from the legislative calendar and has been suspended by its sponsors. 5. M and in the event of a full buyout, where individual policies are issued to all of the members of the pension scheme, the tru

36、stees can proceed to wind-up the scheme, with all future administration being performed by the insurer. The buyout option is accordingly the ultimate form of pension scheme de-risking. 2. Buy-Ins Pension buy-in solutions were developed as a de-risking option for pension schemes that were unable to a

37、fford the often prohibitive costs of a full buyout. Under a pension buy-in, there is no direct contractual link between the insurer and the individual scheme members. Instead, the pension scheme trustees hold the buy-in policy in their name as an investment of the scheme, and the scheme continues to

38、 deal with the payment and administration of benefits. The trustees pay a premium (usually by transferring an equivalent amount of pension scheme cash, bonds and other assets under management) and, in return, receive an income stream from the insurer to cover some or all of the schemes liability to

39、pay member benefits. In the case of some of the larger buy-in transactions, trustees will also require the insurer to post collateral or otherwise secure its obligations to make payments under the policy. 3. Longevity Swaps In their purest form, longevity swaps are derivatives and not contracts of i

40、nsurance. However, it is possible to achieve the same economic effect on an insurance basis, and there have been examples of insurers issuing policies to pension schemes structured in the same way as a longevity swap. Although it is important to ensure that the contract is properly structured as a d

41、erivative or insurance policy according to whether the protection provider is a bank or insurer, in either case the core economics are very similar. In return for the pension scheme paying a fixed monthly amount to the insurer or bank, the counterparty makes a payment to the pension scheme on a mont

42、hly basis (the floating amount) referable to the benefit payable to a defined group of pensioners. In cases where the front-end arrangement involves a longevity swap with a bank as a counterparty, the longevity risk is in derivative form and not capable of being directly reinsured. In situations suc

43、h as this, transformer vehicles (typically based offshore) are used to convert the derivative exposure into insurance risk that can then be reinsured. There have continued to be high levels of transactional activity in both areas pension schemes are benefitting from affordable options in the market

44、and are well positioned to hedge against the risk that their members live longer than is currently predicted. 22 SIDLEY GLOBAL INSURANCE REVIEW Whereas buy-ins and buyouts involve a transfer of inflation, interest rate, investment and longevity risk, longevity swaps offer a purer hedge against the r

45、isk of scheme members living longer than is actuarially predicted; and the fact that there is no upfront payment of a lump sum premium means that the investment, interest rate and inflation risk remain with the trustees. Accordingly, longevity swaps are typically a less expensive alternative to buy-

46、ins and buyouts, albeit more complex to structure and negotiate. Longevity swaps almost invariably require the two-way posting of collateral to protect against the possibility of early termination by reason of the other partys default or insolvency. The collateral is typically based upon the present

47、 value of the covered benefits and will also include a fee element payable to the insurer/bank in the event of termination arising by virtue of trustee default. 4. Index-Based Trades A further alternative structure involves the purchase of longevity protection by reference to an index. Given the inh

48、erent basis risk that exists within these types of transactions, there have been relatively few index-based trades to date, and these types of transactions are perhaps more likely to remain of greater interest to insurers and ILS investors than to pension schemes. B. U.S. MARKET Beginning with the G

49、M and Verizon deals in 2012, the pension de-risking market in the U.S. experienced significant growth. In prior years, the market consisted primarily of one direct writer, The Prudential Insurance Company of America (“Pru”), providing the majority of the capacity, particularly in connection with larger transactions. However, over the past several years, other group annuity writers have become more active in the market, in particular MassMutual, MetLife and, more recent entrants to the market, Athene and American General Life Insurance Company, a subsidiary of AIG (“AGL”), amon