Enstar Group Limited and Maiden Holdings have entered into a new adverse development cover (ADC) reinsurance agreement that will replace the previous loss portfolio transfer (LPT) deal relating to Maiden Re’s quota share of AmTrust Financial Services.
The arrangement will see an Enstar subsidiary cover Maiden Re’s quota share reinsurance contracts with AmTrust for losses incurred prior to December 31, 2018.
Enstar will cover losses in excess of a $2.44 billion retention, up to a $675 million limit.
The announcement follows Maiden’s decision in January to partially terminate its quota share agreement with AmTrust, which required it to return approximately $700 million in gross unearned premium.
Upon signing the new agreement, Enstar and Maiden terminated the previous loss portfolio transfer agreement, under which Enstar would have assumed $2.675 billion of loss reserves associated with Maiden Re’s quota share of AmTrust.
This agreement had previously been entered into on November 9,2018.
The parties said that the premium payable by Maiden Re for the new ADC structure will be $500 million.
