Repurchase Agreement Naic

In order to remedy any discrepancies in the maturity of the reinvested collateral and when a borrower can request repayment of the cash guarantees (as indicated in the securities loan agreement concerned), it is necessary to provide summary information on the duration of the expected return of the securities borrowed from the insurance company and on the date of return of the cash guarantees to the borrower. This identifies potential liquidity shortages under the securities lending program. Securities borrowing contracts are often considered short-term and most agreements allow the borrower to return short-term (and non-penalty) borrowed guarantees in exchange for cash guarantees reserved for the insurance company. As a result, the insurance company must be able to liquidate in the short term (or find other sources of financing) to return the money to the borrower. At the end of 2013, the U.S. insurance industry had a total of approximately $61.6 billion in adjusted book value (BACV) investments in securities loan contracts (see Table 1). As expected, life companies accounted for the bulk of the securities loan ($56.2 billion) due to their buy-back and investment strategy. The table below provides a breakdown of the five main types of coverage (initially sold by the insurance industry under re boarding agreements) as of September 30, 2011. As the table shows, the majority – or almost half – was THE U.S.

Treasury Secretary STRIPS (separate trading of registered interest and principal securities) for $3.5 billion, which are capital-oriented securities. U.S. Treasuries were the second largest type of securities, with nearly 20% of the total. Insurance companies enter into pension transactions (rest), dollar deposits and sight deposits primarily in the form of a short-term investment strategy and access to low-risk cash flows. As noted in a january 2012 Capital Markets Special Report, when insurance companies operate dollar deposits and deposits, they first sell securities for cash payments and agree to repurchase them (i.e. the same primary debtors; the same risks and rights; the same maturity; identical contractual interest rates; similar assets as collateral; and the same aggregate unpaid capital amounts as defined in SSAP No).