Company: OXBRW
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000736
Chunk: 296

Company: OXBRIDGE RE HOLDINGS Ltd
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1
Chunk 296
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 our contracts are fully collateralized and separately structured, with our liability being limited to the
value of the assets held in the trust. We are generally not required to top-up the value of the assets held as collateral in respect
of a particular reinsurance agreement, unless such collateral is subject to market risk. For each reinsurance agreement, a reinsurance
trust is established in favor of the cedant, and the trustee of the reinsurance trust is a large bank that is agreed upon by our company
and the cedant.

The
premium for the contract is ordinarily deposited into the trust, together with additional capital from our company, up to the coverage
limit. Each reinsurance contract contains express limited recourse language to the effect that the liabilities of the relevant reinsurance
contract are limited to the realizable value of the collateral held in respect of that contract. Upon the expiration of the reinsurance
contract, the assets of the trust net of insured losses and other expenses are transferred to our company.

Underwriting

Most
of our reinsurance contracts have other reinsurers participating as lead underwriters, and these lead underwriters generally set the
premium for the risk. We follow the premium pricing of the lead underwriters in most cases subject to the guidance of the Underwriting
Committee of our Board of Directors. Each quarter, our Board of Directors will set parameters for the maximum level of capital to be
deployed for the quarter and the expected premium and risk profile that each of our contracts must meet.

Our
reinsurance portfolio of business continues to be characterized by relatively large transactions with a relatively few number of cedants
and anticipate that our reinsurance entities business will continue to be characterized by a relatively small number of reinsurance contracts
for the foreseeable future.

The
bulk of our portfolio of risks is assumed pursuant to traditional reinsurance contracts. However, from time to time we take underwriting
risk by purchasing a catastrophe-linked bond, or via a transaction booked as an industry loss warranty (as described below) or an indemnity
swap. An indemnity swap is an agreement which provides for the exchange between two parties of different portfolios of catastrophe exposure
with similar expected loss characteristics (for example, U.S. earthquake exposure for Asian earthquake exposure).

Marketing
and Distribution

We
expect that, in the future, the majority of our business will be sourced through reinsurance brokers. Brokerage distribution channels
provide us with access to an efficient, variable distribution system without the significant time and expense that would be incurred