Asset realisation
Reinsurance assets crystallize as the covered gross claims are adjusted and paid. Often the conversion of these paper promises into cash is problematic, either because of technical disputes, security problems with the reinsurer or a desire by the counterparty to hang on to cash as long as possible.
Credit controllers employ various means to recover cash, one of which is to simply sell reinsurance assets to parties better equipped to make the recovery. The sale of reinsurance debt normally takes the form of an assignment of rights under the contract of reinsurance.
James, Brennan & Associates owns and operates www.runoffcentre.com which is a specialist web facility to trade reinsurance debts and also to assist with the administration of commutation transactions.
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