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Kingstone discloses new reinsurance treaties

Kingstone Cos.Inc. unit KingstoneInsurance Co. has entered reinsurance agreements with multiplereinsurers for the treaty year starting July 1.

The new agreements provide increased coverage and a decreasein exposure-adjusted reinsurance costs.

For its catastrophe excess of loss reinsurance treaty, thecompany bought $247 million in coverage from a panel of 39 individualreinsurers. The new coverage capacity represents an increase from the $176million purchased in the expired term, and is in excess of the amount requiredto support growth.

After the $5 million direct retention, the company is nowcovered for up to a $252 million ground-up loss event. It also got a 5.4%exposure-adjusted rate reduction compared to the corresponding premium paid forcatastrophe coverage on the expired catastrophe excess of loss reinsurancetreaty.

In addition, the company bought reinstatement premiumprotection on the first $20 million layer of catastrophe coverage above the $5million direct retention. It also purchased coverage protecting up to a1-in-250 year event.

The maximum pretax retained loss in a catastrophe event forthe company rose to $3 million from $2.4 million, aligning its retention withits increased level of statutory surplus.

The company maintained its ceding percentage at 40% for thepersonal lines quota share treaty, which is again on a net of catastrophereinsurance basis. Maiden Re and Swiss Re continue as treaty participants, eachwith a 50% share of the treaty.

For the per-risk excess of loss treaties, the maximumretention on any one policy loss on a pretax basis rose to $500,000 from$450,000 in personal lines and to $500,000 from $425,000 in commercial lines.Total protection under the treaty is for a single loss of up to $4.5 million,covering the maximum policy limits currently offered by the company.