Document background
The Reinsurance Security Agreement is a critical document used in Swiss reinsurance arrangements to establish and maintain collateral security for reinsurance obligations. This agreement becomes necessary when a cedent requires collateral from a reinsurer to secure reinsurance recoverable, particularly important in cross-border transactions or when dealing with non-admitted reinsurers under Swiss regulations. The document addresses Swiss regulatory requirements, including FINMA guidelines, and provides detailed mechanisms for collateral valuation, maintenance, and enforcement. It includes specific provisions for different types of eligible collateral, calculation methodologies for required collateral amounts, and procedures for dealing with collateral shortfalls or excess. The agreement is designed to protect the cedent's interests while providing clear operational guidelines for all parties involved in the security arrangement.
