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Reinsurance rates down at April 1 renewals; MetLife's court win negative for bondholders


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Reinsurance rates down at April 1 renewals; MetLife's court win negative for bondholders

Inthe news

Rates fell at the April 1 renewals for the fourth consecutiveyear despite signs of an increase in demand for reinsurance, according to areport released by Willis TowersWatson Plc's Willis Re. Prices at April 1 fell by "marginallyless" than they did 12 months ago, suggesting a slowdown in the rate ofprice decline. However, in the April 1 report Willis Re warned that this"by no means" signals that the industry has reached a pricing floor.

StateFarm Mutual Automobile Insurance Co. completeda privately placed renewal of Merna Re Ltd. series 2016-1, a $300 millioncatastrophe bond transaction that provides coverage for U.S. earthquake risks,Artemis reported.

A federal court's decision that effectively removesMetLife Inc.'s nonbanksystemically important financial institution designation is a creditnegative for the insurer's bondholders because it removes the additionaloversight related to solvency, capital adequacy and liquidity, according toMoody's, Bloomberg News reported.

In related news, the Federal Reserve Bank of New York pulledits team of supervisors from the MetLife's New York headquarters after it won alegal challenge to shed its SIFI tag, TheWall Street Journal reported.

The impact of a new Federal Housing Finance Agency rulerestricting captive insurance companies from continued membership in thefederal home loan bank system will vary widely by institution.

"The magnitude of the impact will depend, inpart, on certain FHLBanks' financial condition and results of operations at thetime of membership termination or maturity of related advances," theFHLBanks Office of Finance said in a report.

AssuredGuaranty Ltd. said in a letterto both Puerto Rico and Washington that the island has not released completefinancial information needed by the insurer to plan for possible draws on itsinsurance policies in connection with the commonwealth's debt restructuring,Bloomberg News reported. The insurer, which guarantees repayment on about $3.8billion of the commonwealth's bonds, also questioned Puerto Rico's resolve inworking with its creditors, saying that responses of the commonwealth and itspublic corporations seem to indicate that they are "not serious"about reaching an agreement that would lead to a consensual restructuring.

U.S. Bank Trust NA, the trustee for bonds issued bythe island's PRIFA infrastructure authority, submittedan insurance claim under a policy written by Financial Guaranty Insurance Co. for about $6.4 milliondeficiency for the interest payments due on the bonds, Reuters reported.

A subsidiary of Swiss Re Life & Health America Inc. unit asPrimerica Life Insurance Co.'s reinsurer on a coinsurance agreement covering ablock of term life insurance policies that were in force on Dec. 18, 2009.

EnstarGroup Ltd. said one of its wholly owned subsidiaries a transaction toreinsure portfolios of Allianz Re's U.S. run-off business.

In executive moves, CopperPoint Mutual Insurance Co. Marc Schmittlein president and CEO.

Maurice Hebert will resign as chief accounting officer of

Arkansas Insurance Commissioner Allen Kerr a decrease in thestate's workers' compensation rates of 4.3% in overall loss cost in thevoluntary market and 1.6% overall average assigned risk.

Inother parts of the world

The PRA and Financial Conduct Authority confirmed the launch of Flood Re this month.The government-backed scheme, which is designed to help provide customersbetter access to affordable flood insurance cover, will start acceptingpolicies on Monday. Up to 350,000 households are expected to benefit from thescheme.

Dutch insurers have still not developed a goodstrategy for the long term, De Nederlandsche Bank said in a reporton the financial sector. The supervisor warned about the difficult situationfacing insurers, saying their earnings are under pressure due to lower demandfor life insurance and stiff competition.

The day ahead

Early morning futures indicators pointed to a lower openingfor the U.S. market.

In Asia, the Hang Seng dropped 1.34% to 20,498.92, and theNikkei 225 fell 3.55% to 16,164.16.

In Europe, as of midday, the FTSE 100 was down 1.23% to6,098.76, and the Euronext 100 had fallen 1.91% to 847.86.

On the macro front

The construction spending report, the PMI and ISMmanufacturing indices and the consumer sentiment report are due out today.