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CCRIF Rebids Runoff Model
The Caribbean Catastrophe Risk Insurance Facility (CCRIF) is out to bid again for a runoff component to its excess rainfall (XSR) model. The development of the runoff module comes in response to criticism from regional governments that it failed to take into account runoff impact during heavy rain events.
According to the CCRIF announcement, the runoff component should be “capable of estimating the water depth and velocity over the terrain due to pluvial or fluvial floods.”
CCRIF SPC @ccrif_prRevised REOI - Consulting Services for a Firm to Develop a Runoff Module for the Caribbean and Central America .....
Request For Expression of Interest - Consulting Services for a Firm to Develop a Runoff Module for the Caribbean and Central America | CCRI…A resilient Caribbean region and beyond with optimised disaster risk management and climate change adaptation practices supporting long-term sustainable development.ccrif.org
December 7th 20191 Retweet2 Likes
The runoff module will be included in CCRIF’s “XSR 25” model being developed for use in loss calculations and payouts due to excess rainfall in modeled countries.
Water runoff and its impact has been a sticking point to broader adoption of CCRIF in the region. A recent draft report by the World Resources Institute said that modeled runoff was key barrier to adoption by Central American governments in particular.
In calculating losses, CCRIF’s current excess rainfall model does not account for the movement of water once it hits the ground. Instead, it relies exclusively on the aggregated amount of rainfall over an affected area to estimate losses. Some observers argue that this approach is more appropriate for small islands, which typically have simpler hydrological conditions and topographies than countries with larger accumulation basins, where more sophisticated flood modeling is required. CCRIF is seeking to address this issue by developing a new runoff module for the excess rainfall model. It hopes the addition will make the product more attractive to Central American clients.
BEAT Regs Give Some Breathing Room to Offshore Insurers, Reinsurers
The Internal Revenue Service (IRS) issued its final proposed regulations on Friday implementing parts of 2017 tax legislation that puts up barriers to offshore and foreign catastrophe reinsurers into the U.S. market.
The rules implement 2017’s Tax Cuts and Jobs Act and its Base Erosion and Anti-Abuse Tax (BEAT). Although the framework of the regulation keeps the fundamental protectionist aspects of BEAT’s 10% tax hike against non U.S. domiciled reinsurance, some modifications soften the blow around the periphery.
A analysis issued by the Wall Street law firm Sullivan & Cromwell pointed to new rules that permit an “election to waive deductions for all tax purposes to avoid the threshold for BEAT application.”
the New Proposed Regulations offer taxpayers an election to forgo (on an item-by-item basis) deductions that are otherwise allowable for Base Erosion Payments as necessary to ensure that taxpayers will not exceed the relevant Base Erosion Percentage threshold [and] will therefore not be subject to BEAT. This election is proposed to be available on a retroactive basis (i.e., by filing an amended return). As a result, a taxpayer’s maximum exposure to BEAT tax liability may in effect be limited to regular tax on additional net income in an amount equal to its deductions for Base Erosion Payments that exceed the Base Erosion Percentage threshold.
Earlier this year the global industry lobbying group, Insurers Europe, pushed for the specific changes in a comment letter that described the BEAT provisions as “extremely punitive and disproportionate.”
Insurance Europe also believes that the BEAT is discriminatory towards non-US affiliate reinsurers because it applies to gross premiums paid to foreign affiliate reinsurers but not to premiums paid to US-based affiliate reinsurers for the same type of transaction. The BEAT also results in double taxation for foreign affiliate reinsurers and the proposed regulations do not provide any relief in this respect. Finally, applying the BEAT to gross rather than net reinsurance payments does not reflect the economic substance of a reinsurance contract and goes against the long-established practice of levying taxes on net rather than on gross transactions.
NOAA’s 2019 hurricane summary video.
Sussex Capital is Brit’s Bermuda-based investment manager offering ILS products to institutional investors, something the broader Lloyd’s market has been slow to adopt.
…ahead of the eruption, authorities raised its Volcanic Alert Level to Level 2, as scientists observed increasing amounts of sulphur dioxide gas - a key indicator of rising magma deep in its bowels.
PG&E had previously settled for $1 billion with cities, counties and other public entities as well as for $11 billion with insurance carriers related to the wildfires
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