Still, owners of captives are maintaining a wait-and-see attitude when it comes to captives being used to reinsure
based Archer Daniels Midland, the flour and grain company, to use its Vermont-based captive to reinsure
its group life insurance benefits written by Minnesota Life Insurance Co.
A PORC has historically defined a captive that reinsures
risk of another insurance company with the owner of the PORC producing the insurance risk that is reinsured into its captive.
If the life insurers reinsure
that business, they can recognize the present value of those gains and help their reserves and capital position, too," Conroy said.
The rating applies to Maryland Casualty Company and seven affiliates that reinsure
with Maryland Casualty.
The EITF reached a consensus that to qualify for reinsurance contract accounting, a contract that reinsures
risks arising from short-duration insurance contracts must meet three conditions that relate to qualification as a short-duration contract, risk-transfer issues and the nature of the ultimate premium expected to be paid or received under the contract.
In addition, this rating action also applies to Home's six intercompany pool members, led by The Home Insurance Company, and an affiliate that fully reinsures
with The Home.
USF RE also reinsures
property and casualty business through reinsurance intermediaries nationwide.