For reinsurance contracts, it is usually sufficient to know the country in which the ceding insurer is located.
In some countries reinsurance contracts are subject to regulatory or trust funding requirements or to premium taxes or other fiscal charges. A reinsurance contract is subject to these regulatory or fiscal impositions when the ceding insurer is located in the relevant country.
If a contract reinsures an insurer’s branch, the location of the branch determines the application of fiscal and regulatory requirements to the contract.
The location of a risk insured by a ceding insurer has no bearing on the application of fiscal and regulatory requirements to a contract reinsuring the ceding insurer.
Countries where additional criteria must be considered
The following are examples of reinsurance contracts that are subject to “local” requirements even if the ceding insurer is not located in the country concerned
- Hong Kong: a reinsurance contract arranged via a Hong Kong intermediary.
- Israel: a reinsurance contract arranged via a coverholder in Israel.
Global contracts
A Global contract is a contract insuring risks located in more than one country.
Focus on the location of the ceding insurer means that the concept of global contracts has less resonance for reinsurance. A reinsurance contract is not a global contract because the underlying risks reinsured are located in different countries.
Nevertheless, a reinsurance contract can reinsure more than one ceding insurer, and those insurers may be located in more than one country. If so, different fiscal and regulatory requirements may apply.
