Midwest Holding Inc., a technology-driven life and annuity platform, has sold a majority ownership of a consolidated reinsurance facility to a subsidiary of ORIX Corporation USA.
Under the terms of the agreement, a subsidiary of ORIX USA purchased 70% of Seneca Incorporated Cell, LLC 2020-01 (SRC1), a Midwest consolidated reinsurance cell.
Midwest established SRC1 in early 2020 as the first reinsurance cell of Seneca Re, a Vermont domiciled captive reinsurance company.
SRC1 has reinsured premium from its sister insurance company and Midwest subsidiary, American Life & Security Corp.
ORIX Advisers, LLC, another subsidiary of ORIX USA, will be the manager of the assets underlying SRC1’s reinsurance obligations going forward, replacing Midwest’s asset management arm, 1505 Capital LLC.
“This is a meaningful partnership for Midwest as we look forward to a long-term collaboration with the team at ORIX USA,” said Midwest Holding Chief Executive Officer Georgette C. Nicholas.
“SRC1 was established as a warehouse vehicle to hold generated premium to be sold in bulk to new capital providers in the future. This transaction is the first demonstration that our warehouse model works, and we are thrilled to be partnering with such a high-quality counterparty as ORIX USA.”
“We are pleased to announce this strategic initiative with Midwest through this transaction and view this as the starting point for a robust relationship with the company,” added Art Mbanefo, Chief Investment Officer and Head of Principal Business and Asset Management, ORIX USA.
“We believe our asset management and structuring capabilities, along with our ability to strategically invest our capital, allows us to deliver innovative financing solutions to our partners and clients.”
Midwest has established a new warehouse vehicle, SRC3, to be available for reinsurance transactions.