ABIR opposes S&P Ratings’ proposed debt treatment

Written by Adam Cadle

25/04/2022

The Association of Bermuda Insurers and Reinsurers (ABIR) is strongly opposing a proposal by Standard & Poor’s Global Ratings to disallow senior debt as a form of available capital, calling the draft plan “disruptive” and an “overuse of market power”.

S&P seeks to “potentially remove capital credit for senior debt, which is counter to traditional finance theory that defines a firm’s capital structure to include debt”, according to ABIR CEO John Huff.

The other key issue ABIR pointed out is an ambiguous timeline and lack of a transition period for the rollout of the changes. “Insurers and reinsurers will have no time to the new debt treatment before S&P has indicated the changes will go into effect,” it added.

ABIR’s letter to S&P, which also outlines objections in other key areas, is available here.

Related Articles