Business Context and Reporting Period
Company: Assurant, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: May 5, 2009
Event: Entry into Material Definitive Agreements regarding a catastrophe reinsurance bond program.
Key Financial Metrics
This filing does not report standard operating financial metrics such as revenue, profit, cash flow, or margins. The primary financial data point disclosed is:
- Catastrophe Bond (CAT Bond) Issuance: $150 million aggregate amount.
- Structure: Fully collateralized catastrophe reinsurance bond program.
- Counterparties: Ibis Re Ltd. (Reinsurer) and Goldman Sachs International (Swap Counterparty).
Material Changes
The filing discloses the execution of two reinsurance agreements between certain Assurant subsidiaries and Ibis Re Ltd. on May 5, 2009. This transaction establishes a new risk transfer mechanism funded by the issuance of two classes of CAT bonds to qualified institutional buyers under Rule 144A.
Outlook, Risks, and Contingencies
Transaction Structure:
- Ibis Re established two insurance trusts to hold investments securing payments to Assurant subsidiaries and principal repayment to bondholders.
- Two swap agreements were entered into with Goldman Sachs International.
- Swap Counterparty Events: Swaps may be terminated due to payment default, insolvency, changes in law, or merger transactions involving Goldman Sachs International.
- Early Redemption: If a Swap is terminated and Assurant (or an affiliate) does not appoint a replacement counterparty or enter an interim swap agreement within two business days, the related CAT Bond class becomes subject to early redemption on the next quarterly payment date.
The filing incorporates a press release (Exhibit 99.1) describing the transaction but does not provide additional narrative commentary within the text of the 8-K itself.
Investor Verification Checklist
- Verify the specific terms and triggers for the $150 million CAT Bonds in the attached Reinsurance Agreements (Exhibits 10.1 and 10.2).
- Review the credit risk exposure associated with Goldman Sachs International as the Swap Counterparty.
- Confirm the investment composition of the insurance trusts holding the collateral.
- Assess the impact of potential early redemption scenarios on the company's reinsurance coverage.