Practice/Industry Group Overview
Our regulatory and transactional group is widely recognized for its experience and depth and for its successes for clients on a broad range of regulatory and transactional matters. We represent insurers, reinsurers and intermediaries from across the US, Canada, the UK, Bermuda, the Caribbean, Latin America, continental Europe, Hong Kong, Japan, Australia and elsewhere in matters including property and casualty, life and health, financial, aviation and fidelity and surety business.
We have developed a highly technical understanding of insurance and reinsurance and its regulation, bred of many years of service to the industry. A number of our lawyers have spent time working with the regulators in the US, the UK and Hong Kong. We assist clients in applying for, negotiating, drafting and securing regulatory approval of reinsurance agreements, including unique and complex arrangements. Amongst other things, we have represented parties in significant equity investments by reinsurers in their ceding companies, and in the formation, licensing and authorization, acquisition and sale of insurers, reinsurers and intermediaries. We also advise on mergers and acquisitions, portfolio transfers and alternative risk transfer transactions, including through captives, sidecars and other special purpose vehicles or through investments in insurance linked securities.
ART, ILS and Securitization
We advise clients on developments in non-traditional risk transfer, including alternative risk transfer (“ART”), structured insurance products, emerging market political and investment risk, risk transfer securitizations, ILS, ILS fund formation and investments, P&I clubs, alternative risk products such as “funds at Lloyd’s”, “gearing” reinsurance contracts, cat bonds, industry loss warranties (“ILWs”), derivative transactions, including credit default swaps and longevity and mortality swaps, loss portfolio transfers, including third party Lloyd’s RITCs, and transformers, side cars, special purpose vehicles and special purpose insurers often associated with ART transactions and letters of credit. Our ILS team brings together experienced practitioners in fields such as banking and finance, insurance and reinsurance products and transactions, insurance regulation, securitization, and insurance and reinsurance tax. The key to our success is our multi-disciplinary approach to serving our clients’ needs.
We advise on regulatory, operational, international tax and structuring of collateralised insurance transactions, transformers and securitizations in the US, UK, Ireland, Luxembourg, other EU jurisdictions, Guernsey, Bermuda, Cayman Islands and other jurisdictions.
We represent clients in the formation, ongoing advice, run-off and closure of captive insurers, association captives and mutuals in the US, UK, Ireland, Luxembourg, other EU jurisdictions, Guernsey, Bermuda, Cayman Islands and other jurisdictions and special purpose insurance vehicles and segregated account and protected cell companies, including Bermuda "Private Act" segregated account insurance companies.
Captives can provide our clients with opportunities to manage risk better and participate in positive underwriting results. The Insurance and Reinsurance Department advises insureds, producers and insurers and reinsurers about the role that captives can play in developing a complete risk management and insurance program. We assist in the formation, licensing, redomestication and capitalization of captives both onshore and offshore and in relation to the reorganization of group captives. Our expertise in reinsurance transactions enables us to document the cession of risks to captives. We are well versed in the complicated tax attributes of investments in, and earnings of, captives and appreciate that captive structures often lack the benefit of safe-harbors or IRS guidance. We regularly help clients in understanding whether premiums ceded to captives are fully deductible and the tax treatment of income and gain from offshore captive investments and in dealing with transfer pricing issues. We have been at the forefront of the development of the use of protected cell companies and special purpose vehicles in offshore jurisdictions to "transform" risk between the insurance and capital markets and to structure ART programs.
While e-commerce holds great potential for facilitating the sale and administration of insurance products, numerous pitfalls must be avoided, including advertising and disclosure, commission splitting and licensing issues. Our experience has enabled our clients, including insurers and producers, to develop programs that meet the differing regulatory requirements across states in the US and jurisdictions in Europe while fulfilling their business requirements. In addition, the firm’s formidable intellectual property practice is available to all insurance clients in connection with patenting, trademark and licensing issues, copyright, unfair competition and other intellectual property issues affecting the business of insurance.
Excess & Surplus Lines
In the area of Excess and Surplus Lines, we represent a considerable number of major US wholesale brokers and also serve as US regulatory counsel and tax advisor for numerous US and overseas insurers in Bermuda, the UK, Finland, France, Germany, Italy, Sweden and Switzerland. In this capacity, we perform the vital function of maintaining these insurers’ eligibility status with the National Association of Insurance Commissioners where relevant, as well as the continuing requirements for eligibility in the various states where these entities are approved for surplus lines business.
Our Excess and Surplus Lines Law Manual is widely acclaimed as the pre-eminent industry guide in the surplus lines community and counts among its subscribers many of the major brokers, State insurance commissioners, surplus lines associations and stamping offices and numerous domestic and overseas insurers. Our surplus lines manual is also linked to the websites of the National Association of Professional Surplus Lines Offices and the American Association of Managing General Agents, both of which organizations we are privileged to serve as industry consultants in addition to being associate members.
Formation and Licensing
We assist clients, including insurers, reinsurers, surplus lines carriers, producers, intermediaries and other regulated businesses, in forming and licensing companies in all jurisdictions across the US, the UK (including at Lloyd’s), Hong Kong and passporting across Europe on an establishment or services basis. We help clients determine the most suitable legal form and address issues of capital and surplus structure, finance, taxation, utilization of holding companies, legal investments and use of service and management agreements.
In this way, we assist clients to determine the most advantageous jurisdiction for establishment. We guide clients through the often unwritten regulatory rules and procedures to enable them to begin writing business as quickly as possible. We have particular experience advising on what constitutes carrying on insurance businesses in the US, the UK, the EU and Hong Kong, as well as the implications of unauthorized underwriting.
Latin American Regulatory and Transactional
The Firm has an established and growing Latin American insurance and reinsurance practice. In recent years, we have represented various U.S. and European insurers and reinsurers in navigating the often-complex local regulatory requirements of the individual countries and in evaluating potential transactions with local companies. We also serve as liaison counsel for companies in monitoring and complying with requirements concerning authorization and licensing, policy wording and coverage issues.
We have built a trusted network of local counsel that includes many of the finest attorneys and firms in the region, and have also developed relationships with many of the local insurers and reinsurers, all of which has proven invaluable when our clients need local advice and/or a local partner to pursue a business opportunity. Members of our Latin American team are fluent in the native languages of the Latin American jurisdictions and possess a keen understanding of the region's various cultures and traditions. Together with our significant expertise in the substantive (re)insurance issues and local laws and regulations, this permits us to counsel our clients so as to avoid many of the misunderstandings and frustrations that can arise with local regulators, local business partners and local counsel in Latin America and other developing economies.
In addition, we maintain a topic area on our blog concerning Latin American insurance developments that can be accessed by clicking here. If you would benefit from a daily email update from our blog, please feel free to let us know and we will sign you up for our complimentary subscription service.
The Insurance and Reinsurance Department applies its extensive experience and resources in representing the interests of clients in legislative and regulatory developments. In addition, using our insurance regulatory and compliance analysts and state of the art technology, the Department monitors legislation throughout the US, UK, Europe, Hong Kong and Latin America.
Lloyd’s and London Market
Our lawyers regularly advise on the practices of Lloyd’s and on the law, byelaws and regulatory requirements affecting the conduct of business at Lloyd’s. We advise participants in the market (managing and members’ agents, members, syndicates, investors and brokers) on both contentious and non-contentious issues. We have been closely involved with many of the dramatic changes in the Lloyd’s market which have taken place over the past twenty years.
We have advised on corporate capital from its introduction to the market, acting on one of the first London Stock Exchange-listed spread vehicles to be established and advising on the first listed spread vehicle to use reinsurance to "gear" its underwriting capital. We advised on the structuring and flotation of the first listed integrated vehicle, on conversion offers making corporate capital available to individual Names and on developing new bases for limited liability participation at Lloyd’s. We have acted on more than twenty acquisitions and disposals of Lloyd’s underwriting agents (both private and listed), corporate members, syndicates and Lloyd’s brokers and on ten IPOs of Lloyd’s spread, integrated, conversion and broker groups.
Mergers, Acquisitions, Reorganizations and Capital Transactions
We have considerable experience representing a wide variety of clients in insurance-related mergers and acquisitions and reorganization transactions. These transactions have included stock and share purchases and sales, mergers, business and asset purchases and sales, renewal rights transactions, management buy-outs, management buy-ins, joint ventures, portfolio transfers in the US, the UK (Part VII transfers), cross-borders within Europe and in Hong Kong, assumption reinsurance and other forms of extensive corporate restructuring and reorganization.
By combining our knowledge of the insurance and reinsurance industry with our experience in corporate matters, we provide pragmatic and creative approaches to complex merger and acquisition and reorganization transactions. We represent clients as investors and lenders and represent investment banks, sponsors, nominated advisers, corporate finance houses and other entities in flotations, public offerings and private placements. We advise capital providers and insurers and reinsurers on transaction structures to provide credit for reinsurance or surplus relief.
New Products and Programs
We help clients to develop innovative and creative insurance products and programs. We also help clients to monitor and review their inwards and outwards contracts for compliance and risk management purposes. Department members are experienced in providing advice on conduct of business and sales practices and in preparing rate and form filings and in expediting the review process for such filings. We have assisted clients in regulatory matters regarding new product lines, designing and drafting applications, policy forms and endorsements, designing administrative and compliance programs and preparing marketing material. Our experience enables us to produce practical, industry-accepted documents including insurance policies, reinsurance agreements, terms of business agreements with brokers and agents, managing general agency contracts, underwriting agreements, binding authorities and lineslips and outsourcing agreements.
Regulatory and Criminal Investigations and Market Conduct
We advise our clients on the day-to-day regulatory issues that affect them, covering the full spectrum from authorization and approval to disciplinary issues. Our lawyers authored the chapter on Market Conduct for the definitive Matthew Bender treatise, "New York Insurance Law", the chapter on Reinsurance Regulation in the N.7. Bar Association's publication, "Reinsurance Law Practising", and the corporate and regulatory chapters of Business Law and Practice in Hong Kong.
In the US, state insurance departments have expanded their scrutiny of insurers’ market conduct activities. The Department assists clients in preparing for market conduct examinations, responding to criticisms in examination reports and implementing necessary changes. In the UK and Europe, directive-led regulation has extended from insurance to reinsurance and further legislation is in the drafting stage. We can help clients in dealing with issues arising from FSA Arrow visits and with FSA and Lloyd’s disciplinary processes.
Restructuring & Insolvency
The Insurance and Reinsurance Department in the US provides services for creditors of insolvent insurers and reinsurers, insurance departments as rehabilitators and liquidators and state guarantee funds and insolvency practitioners. The practice in the UK (which is led by an authorized insolvency practitioner) is consistently ranked in the top five of some fifty firms in the field by Legal 500 and Chambers. In the UK we have extensive experience of acting for UK insurance and reinsurance companies in provisional liquidation and liquidation. Our lawyers have represented regulators, liquidation bureaus and insolvency practitioners with respect to the structuring and implementation of complex multi-party receiverships. We have advised both life/health and property/casualty guaranty funds regarding their rights and obligations under their enabling statutes and we regularly advise insurers and reinsurers in relation to their dealings with other companies in conservation, rehabilitation or liquidation.
Run-off and Exit Solutions
We are at the forefront of advising clients engaged in the run-off of discontinued business internationally. The Department assists US and UK clients as well as those in other jurisdictions in relation to all aspects of business in run-off. We assist clients in seeking to facilitate the run-off process through loss portfolio transfers, adverse development covers, schemes of arrangement, transfers of discontinued business and other exit solutions. We advise clients and act on sales and acquisitions of run-off portfolios and companies in run-off. We also advise and act on contentious claims and litigation for companies in run-off.
We offer a "one-stop shop" in many instances where such exit solutions relate to both European and US business. The pre-eminence of our lawyers in international insurance and reinsurance insolvency law enabled us successfully to prosecute the first petition under Chapter 15 of the US Bankruptcy Code for US relief in aid of a non-US solvent scheme of arrangement and, in the process create critical precedent for the industry. We are regularly invited to speak on this area by both the industry and the international judiciary. We are also actively involved in US and international law reform related to run-off solutions, including the development of legislation enabling effective solvent schemes of arrangement throughout the US.
In conjunction with our Tax Group we provide advice on issues relating to FET, VAT and IPT in the context of insurance transactions, and regularly advise clients on the best approaches to domestic and international tax structuring. We can advise on issues relating to safe-harbors and IRS Guidance.