On July 16, FEMA launched its primary upheaval bond to transmit take a chance from the National Flood Insurance Program (NFIP) to the hub markets, reports the Artemis blog. This will be the primary upheaval bond to solely provide reinsurance coverage in favor of flood risks.
FEMA is seeking $275 million of reinsurance protection from a FloodSmart Re Ltd. (Series 2018-1) issuance. FloodSmart Re, a Bermuda domiciled special principle insurance vehicle, will seek to issue forth two tranches of annotations to will be sold to insurance linked securities funds to collateralize underlying reinsurance agreements to cover a portion of the National Flood Insurance Program (NFIP) U.S. Flood exposure.
The transaction will cover NFIP losses from flood dealings to are diametrically or indirectly caused by a named storm event impacting the United States and besides Puerto Rico, U.S. Virgin Islands and District of Columbia.