Merna Reinsurance Ltd.

The Artemis Catastrophe Bond and Insurance-linked Securities Deal Directory aims to provide a one-stop resource for information on every cat bond and ILS transaction we hold information on. The content of this Deal Directory is provided as is and there will be some omissions. Help us to keep these cat bond and ILS transaction summaries up to date by contacting us if you see an error or omission that you can correct.

Merna Reinsurance Ltd. - At a glance:

• Issuer / SPV: Merna Reinsurance Ltd.
• Cedent / Sponsor: State Farm
• Placement / structuring agent/s: ?
• Risk modelling / calculation agents etc: ?
• Risks / Perils covered: Multi peril
• Size: $1.1B
• Trigger type: Indemnity
• Ratings: ?
• Date of issue: Jul 2007

Merna Reinsurance Ltd. - Full details

Merna Reinsurance Ltd. transfers just over $1.1 billion of natural catastrophe risk from State Farm, the largest homeowners and auto insurer in the U.S., to investors, either as bonds or as loans.

The notes mature in three years and pay off for investors if State Farm’s aggregate catastrophe losses in the three-year period remain below a certain dollar amount.

This transaction effectively transfers a portion of State Farm’s risk of natural catastrophe losses in the U.S. and Canada including hurricane, earthquake, tornado, hail, winter storm and brush fire to the capital markets.

Thus, the rated securities are indemnity-based catastrophe bonds that provide cumulative, three-year aggregate excess of loss protection.