Tharp & Associates

Reinsurance Assumed and Ceded

Tharp and Associates offers a broad range of reinsurance services, including:

  • Novation Transactions
  • Exchange Transactions
  • Premium Audit, Reconciliation and Collection
  • Claim Reviews and Examinations
  • Reinsurance Contract Review and Analyses
  • Underwriting Reviews
  • Systems Reviews
  • Reinsurance Billings
  • Dispute Resolution (Mediation or Arbitration)
  • Commutation

Tharp has a great deal of expertise in commuting and collecting reinsurance, particularly in delinquency proceedings wherein the “Insolvency Clause” comes into play.

In some receiverships, reinsurance ceded is the largest asset on the balance sheet, including both reinsurance recoverables and reserve credits. Reinsurance arrangements are categorized as follows:

  • Treaty (Book of Business)
    • Pro-rata – Surplus or Quota Share
    • Excess – Per Risk, Catastrophe, Aggregate (Stop-Loss)
    • Combination
  • Facultative (Individual Risk)
    • Pro-rata
    • Excess

Regardless of the reinsurance arrangement, Tharp is experienced in analyses, collection and commutation, having collected hundreds of millions of dollars of reinsurance in the U.S. and London markets.

Tharp possesses the expertise and skill sets to effect optimal commutation programs in the United States and abroad. A “commutation” is an agreement between a ceding insurer (reinsured) and an assuming insurer (reinsurer) to cancel and terminate an existing reinsurance agreement between the parties, settling all balances and “set-offs” as between the reinsured and the reinsurer at present values. This requires review and analysis of the reinsurance agreements and contracts, forensic accounting, actuarial analyses, incurred-but-not-reported and time value of money calculations, and negotiation skills, all proficiencies of the Tharp team.