Carrick COO calls for reform after two-year Part VII legacy transfer

The High Court of Justice of England and Wales has approved the transfer of IRB-Brasil Resseguros’s UK branch reinsurance contracts to Community Re, prompting Carrick Group chief operating officer Phil Hernon (pictured) to call for a more proportionate approach to smaller Part VII insurance business transfers.

Phil Hernon, chief operating officer of Bermuda based Carrick Group, said the process took 24 months to transfer less than $25m of assets from IRB-Brasil Resseguros’s UK branch to Community Re.

The transfer was completed through a Part VII insurance business transfer scheme. Community Re, the receiving entity, was acquired by Carrick Group in 2020.

“This transaction has highlighted the cost of transacting a Part VII. We would welcome engagement with stakeholders and regulators to allow smaller balance sheets to be transferred at a proportionate cost, given the costs in relation to the reserves transferred in this Part VII,” said Hernon.

The UK branch of IRB-Brasil Resseguros underwrote reinsurance business between 1974 and 1983, when it ceased operations and entered run-off. Community Re is a UK-domiciled reinsurer that has been in run-off since it ceased writing business in 1984.

“Working with IRB-Brasil has been a pleasure. This transaction ends their involvement in the London Market. It allows management to open a new chapter as they execute their strategy,” Hernon said. IRB-Brasil Resseguros said the transfer process is in line with the company’s current business strategy.

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