Hogan Lovells has advised leading reinsurer SCOR on the value in force (VIF) reinsurance of the individual life insurance business portfolio of BBVA Seguros, the life insurance subsidiary of Spanish bank BBVA. It is the largest deal of its kind to have been put in place in Spain.
BBVA Seguros SA de Seguros y Reaseguros (“BBVA Seguros”), has entered into a 90% quota share reinsurance agreement with the reinsurance entity SCOR Global Life Reinsurance Ireland PLC covering BBVA Seguros’ life insurance portfolio in Spain in force as at 31 December 2012.
Hogan Lovells teams from London, Spain and France worked together to advise SCOR on the reinsurance agreement and the related collateral packages enabling SCOR to acquire a position as reinsurer of mortality insurance policies from BBVA Seguros which cover traditional benefits of mortality and permanent disability under mortgage and consumer loan protection policies.
SCOR Global Life Reinsurance Ireland pays circa EUR 630 million of reinsurance commission to write this business and receives the current reserves of the acquired block at inception of the treaty, leading to a very limited initial net cash transfer. The block of life insurance involved in the VIF transaction is expected to generate a total gross premium volume of around EUR 1 billion for the reinsurer.
Commenting on the deal, lead partner Joaquin Ruiz Echauri said:
“This deal was a tremendous opportunity for SCOR and we were delighted to have the opportunity to work with SCOR and to demonstrate our expertise in VIF reinsurance transactions in the largest deal in Spain of this kind.”
The Hogan Lovells team advising on these transactions was led by insurance partners Joaquin Ruiz Echauri and Victor Fornasier, and banking & finance partner Andrew Taylor.
The team also included partners Joe Bannister (restructuring & insolvency), Sébastien Gros (financial institutions), Casto González-Paramo (competition), José Luis Vázquez (banking & finance) and Miguel Ángel Sánchez (tax). Associates on the deal included Isabel Fons, Felipe Vazquez, Miguel Angel Peris, Juan Garicano, Jaime Bofill, Macarena Correa and Virginia Martinez in Madrid, and Clare Douglas and Sarah Johnson in London.
Belgian law firm Altius (Johan De Bruycker and Kasper Van Landeghem) advised SCOR on the Belgium law aspects.
