Document background
The Reinsurance Trust Agreement is a critical document used in Canadian reinsurance arrangements where a reinsurer needs to provide security for its obligations to a ceding insurer. This arrangement is particularly common in cross-border reinsurance transactions or when required by regulatory authorities for capital adequacy purposes. The agreement establishes a trust account where the reinsurer deposits assets to be held by a qualified trustee, providing the ceding insurer with ready access to funds in case of claims. The document must comply with Canadian federal regulations, particularly those established by the Office of the Superintendent of Financial Institutions (OSFI), and relevant provincial trust laws. It includes detailed provisions for asset management, withdrawal rights, trustee duties, and regulatory reporting requirements. This type of agreement is essential for maintaining regulatory compliance and ensuring proper security arrangements in reinsurance relationships.
