Related-Party Transactions

6 Months Ended

Jun. 30, 2021

Related-Party Transactions [Abstract]

Related-Party Transactions

13. RELATED-PARTY TRANSACTIONS

Parent

Group entered into a $300,000 thousand long term note agreement with Everest Re as of December 17, 2019. The note will pay interest annually at a rate of 1.69% and is scheduled to mature in December, 2028. This transaction is presented as a Note Receivable – Affiliated in the Consolidated Balance Sheet of Holdings. The Company recognized interest income related to this long term note of $1,281 thousand and $1,281 thousand for the three months ended June 30, 2021 and 2020, respectively and $2,549 thousand and $2,563 thousand for the six months ended June 30, 2021 and 2020, respectively.

Group entered into a $200,000 thousand long term note agreement with Everest Re as of August 5, 2021. The note will pay interest annually at a rate of 1.00% and is scheduled to mature in August, 2030.

Group’s Board of Directors approved an amended share repurchase program authorizing Group and/or its subsidiary Holdings to purchase Group’s common shares through open market transactions, privately negotiated transactions or both. The table below represents the amendments to the share repurchase program for the common shares approved for repurchase.

	Common
	Shares
	Authorized for
Amendment Date	Repurchase
(Dollars in thousands)
09/21/2004	5,000,000
07/21/2008	5,000,000
02/24/2010	5,000,000
02/22/2012	5,000,000
05/15/2013	5,000,000
11/19/2014	5,000,000
05/22/2020	2,000,000
	32,000,000

Holdings had purchased and held 9,719,971 Common Shares of Group, which were purchased in the open market between February 2007 and March 2011.

In December, 2015, Holdings transferred the 9,719,971 Common Shares of Group, which it held as other invested assets, at fair value, valued at $1,773,214 thousand, to Preferred Holdings in exchange for 1,773,214 preferred shares of Preferred Holdings with a $1,000 thousand par value and 1.75% annual dividend rate. After the exchange, Holdings no longer holds any shares or has any ownership interest in Group.

Holdings has reported the preferred shares in Preferred Holdings, as other invested assets, fair value, in the consolidated balance sheets with changes in fair value re-measurement recorded in net realized capital gains (losses) in the consolidated statements of operations and comprehensive income (loss). The following table presents the dividends received on the preferred shares of Preferred Holdings and on the Parent shares that are reported as net investment income in the consolidated statements of operations and comprehensive income (loss) for the period indicated.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in thousands)	2021		2020		2021		2020
Dividends received on preferred stock of affiliate	$	7,758	$	7,758	$	15,516	$	15,516

Affiliates

The Company has engaged in reinsurance transactions with Bermuda Re, Everest International Reinsurance Ltd. (“Everest International”), Mt. Logan Re, Everest Insurance Company of Canada (“Everest Canada”) and Lloyd’s Syndicate 2786, which are affiliated companies primarily driven by enterprise risk and capital management considerations under which business is ceded at market rates and terms.

The table below represents affiliated quota share reinsurance agreements ("whole account quota share") for all new and renewal business for the indicated coverage period:

(Dollars in thousands)
							Single
			Percent		Assuming		Occurrence		Aggregate
Coverage Period		Ceding Company	Ceded		Company	Type of Business	Limit		Limit
01/01/2010-12/31/2010		Everest Re	44.0	%	Bermuda Re	property / casualty business	150,000		325,000
01/01/2011-12/31/2011		Everest Re	50.0	%	Bermuda Re	property / casualty business	150,000		300,000
01/01/2012-12/31/2014		Everest Re	50.0	%	Bermuda Re	property / casualty business	100,000		200,000
01/01/2015-12/31/2016		Everest Re	50.0	%	Bermuda Re	property / casualty business	162,500		325,000
01/01/2017-12/31/2017		Everest Re	60.0	%	Bermuda Re	property / casualty business	219,000		438,000
01/01/2010-12/31/2010		Everest Re- Canadian Branch	60.0	%	Bermuda Re	property business	350,000	(1)	-
01/01/2011-12/31/2011		Everest Re- Canadian Branch	60.0	%	Bermuda Re	property business	350,000	(1)	-
01/01/2012-12/31/2012		Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	206,250	(1)	412,500	(1)
01/01/2013-12/31/2013		Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	150,000	(1)	412,500	(1)
01/01/2014-12/31/2017		Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	262,500	(1)	412,500	(1)
01/01/2012-12/31/2017		Everest Canada	80.0	%	Everest Re- Canadian Branch	property business	-		-
01/01/2020		Everest International Assurance	100.0	%	Bermuda Re	life business	-		-
(1)	Amounts shown are Canadian dollars.

Effective January 1, 2018, Everest Re entered into a twelve month whole account aggregate stop loss reinsurance contract (“stop loss agreement”) with Bermuda Re. The stop loss agreement provides coverage for ultimate net losses on applicable net earned premiums above a retention level, subject to certain other coverage limits and conditions. The stop loss agreement was most recently renewed effective January 1, 2021.

In addition, Everest Re entered into a property catastrophe excess of loss reinsurance contract with Bermuda Re, effective January 1, 2019. The contract provides $100,000 thousand of reinsurance coverage for property catastrophe losses above certain attachment points. This agreement expired on December 31, 2019 and was not renewed.

The table below represents loss portfolio transfer (“LPT”) reinsurance agreements whereby net insurance exposures and reserves were transferred to an affiliate.

(Dollars in thousands)
Effective	Transferring	Assuming		% of Business or		Covered Period
Date	Company	Company		Amount of Transfer		of Transfer
10/01/2001	Everest Re (Belgium Branch)	Bermuda Re		100	%	All years
10/01/2008	Everest Re	Bermuda Re	$	747,022		01/01/2002-12/31/2007
12/31/2017	Everest Re	Bermuda Re	$	970,000		All years

On December 31, 2017, the Company entered into a LPT agreement with Bermuda Re. The LPT agreement covers subject loss reserves of $2,336,242 thousand for accident years 2017 and prior. As a result of the LPT agreement, the Company transferred $1,000,000 thousand of cash and fixed maturity securities and transferred $970,000 thousand of loss reserves to Bermuda Re. As part of the LPT agreement, Bermuda Re will provide an additional $500,000 thousand of adverse development coverage on the subject loss reserves. As of June 30, 2021, and December 31, 2020, the Company has a reinsurance recoverable of $883,428 thousand and $886,350 thousand, respectively, recorded on its balance sheet due from Bermuda Re.

The following tables summarize the premiums and losses ceded by the Company to Bermuda Re and Everest International, respectively, and premiums and losses assumed by the Company from Everest Canada and Lloyd’s syndicate 2786 for the periods indicated:

	Three Months Ended				Six Months Ended
Bermuda Re	June 30,				June 30,
(Dollars in thousands)	2021		2020		2021		2020
Ceded written premiums	$	73,689	$	31,669	$	144,487	$	62,169
Ceded earned premiums		73,734		31,813		144,611		62,313
Ceded losses and LAE		19,986		12,208		(10,164)		(9,951)

	Three Months Ended				Six Months Ended
Everest International	June 30,				June 30,
(Dollars in thousands)	2021		2020		2021		2020
Ceded written premiums	$	-	$	-	$	-	$	-
Ceded earned premiums		-		-		-		-
Ceded losses and LAE		-		(7)		-		16

	Three Months Ended				Six Months Ended
Everest Canada	June 30,				June 30,
(Dollars in thousands)	2021		2020		2021		2020
Assumed written premiums	$	-	$	(235)	$	-	$	1
Assumed earned premiums		-		(46)		-		(7)
Assumed losses and LAE		7		(948)		66		650

	Three Months Ended				Six Months Ended
Lloyd's Syndicate 2786	June 30,				June 30,
(Dollars in thousands)	2021		2020		2021		2020
Assumed written premiums	$	73	$	630	$	672	$	(2,401)
Assumed earned premiums		112		639		641		(2,183)
Assumed losses and LAE		1,796		(1,438)		214		(624)

The following table summarizes the premiums and losses that are ceded by the Company to Mt. Logan Re segregated accounts and assumed by the Company from Mt. Logan Re segregated accounts.

	Three Months Ended				Six Months Ended
Mt. Logan Re Segregated Accounts	June 30,				June 30,
(Dollars in thousands)	2021		2020		2021		2020
Ceded written premiums	$	46,571	$	41,864	$	127,943	$	137,214
Ceded earned premiums		60,117		60,412		126,105		140,267
Ceded losses and LAE		21,613		36,835		94,607		74,300