Oxbridge Re Holdings, a provider of reinsurance solutions to P&C insurers in the Gulf Coast region of the US, has announced the incorporation of SurancePlus, a new wholly-owned subsidiary.
Incorporated in the British Virgin Islands (BVI) in December 2022, SurancePlus will issue tokenized reinsurance securities that indirectly represent fractionalized interests in reinsurance contracts.
These contracts will be underwritten by Oxbridge Re NS, Oxbridge Re’s reinsurance subsidiary. The token offering is expected to commence in the upcoming months.
The DeltaCat RE Tokens will be offered to accredited investors in the United States by SurancePlus under Rule 506(c) of Regulation D and to non-US investors pursuant to Regulation S.
Token holders will receive the right to a return on the investment from the performance of the underlying reinsurance contracts created by Oxbridge Re Holdings Limited. In a profitable year, SurancePlus anticipates token holders could receive an annualised return of up to ~20% to ~40%, according to the firm.
Jay Madhu, Oxbridge Re Holdings President and CEO, commented: “High barriers to entry have traditionally excluded reinsurance as an alternative investment opportunity for many investors.
SurancePlus will democratise access to reinsurance as an alternative investment opportunity by offering a solution that leverages key qualities of blockchain technology to create a well-designed digital security, the performance of which will not be correlated to the financial markets. Instead, the proceeds raised from the offering of the DeltaCat Re tokens will be invested in reinsurance contracts.”
SurancePlus has partnered with Securitize LLC, an SEC-registered transfer agent, to implement the tokenized reinsurance securities on its Securitize.io platform.
It has also engaged Ogier BVI as its BVI counsel and Bull Blockchain Law LLP, as its United States Securities and Exchange Commission (SEC) counsel. Both firms were selected because each holds digital securities and tokenization expertise.
Madhu added: “By complying with applicable US securities laws, we expect to create significant shareholder value by raising additional capital through token issuance and investing these funds in underwriting higher value reinsurance contracts.”
“Security tokens are an innovative way of both financing projects such as SurancePlus’ and enabling more investors to participate. With investors able to purchase fractional interests through a website and have their interest permanently and transparently recorded on a blockchain, investors can access opportunities that were typically out of reach,” said Jamie Finn, President of Securitize, Inc. “SurancePlus is leveraging the Securitize platform to validate and onboard their investors, whose security tokens will be transacted and recorded on the blockchain.”