Charles F. Barr, Esq.
82 Main St.
Ashburnham, MA 01430
charlesfbarr@gmail.com www.CFBarrADR.com
Collection of Experiences
General Counsel and C-Suite Executive Management for over 25 years with property-casualty and life-annuity insurers and reinsurers, reinsurance intermediary, derivative dealers and investment advisors. Co-managed Workers’ Compensation underwriting. Managed run-off claims department utilizing TPAs.
Mergers & Acquisitions:
Formed: US, Bermuda and European reinsurers and insurers; US, UK and Japanese derivatives dealers and introducing agents; and US and UK broker-dealers. Licensed UK insurer for passporting through EU. Formed and qualified managing agencies (FR, NE, IT) to bind/quote/issue Lloyd’s policies.
Sold: General Re Corp to Berkshire Hathaway; Tempest Re to ACE, Reliance Standard Life to Dresser Industries.
Bought/Integrated: Cologne Re (Germany); National Re; Winterthur Insurance (Switzerland); a Lloyd’s Managing Agency (UK); New England Asset Management.
Formed: Bermuda protected cell reinsurer and a Bermuda exempt Investment Fund and an Irish Collective Asset Vehicle (ICAV) investment fund to invest in the reinsurer as part of a structure to provide property catastrophe reinsurance.
Holding Company Structuring and Dividends:
Holding Company: Redesigned and pooled US holding company system; redomesticated three insurers to consolidate regulation; redesigned and merged UK & European re/insurance platforms (from France and UK into Ireland); utilized vertical ownership of US insurers to double count surplus for enhanced premium to surplus ratios.
RBC- and Tax-Effected Reinsurance: redesigned US inter-company gross reinsurance pool; maximized Risk Based Capital scores via pooling; redesigned quota share reinsurance of US business to Bermuda affiliate for tax efficiencies; redomesticated Cayman company to Switzerland.
Dividending within group, then to ultimate shareholders: Structured and timed non-extraordinary dividends within the US holding company to: maximize payments to parents, maximize annual Net Investment Income to increase future dividend-paying capacity, immediately return amounts needed by subsidiaries (after maximizing parent’s NII), and accumulate subsidiary dividends for payment to owners or investment in affiliates.
Negotiated Surplus Note with Texas DOI to fund operating insurers’ expanding business.
Global Derivatives Dealer: Structured and tax-planned US, UK and Tokyo offices to run a global, balanced book of interest rate swaps and currency exchange. The UK derivatives dealer was a regulated broker-dealer. Obtained bilateral Advance Pricing Agreement from IRS and Inland Revenue (HMRC) to avoid double taxation. Formed US broker-dealer for securities trades hedging derivative positions. Developed legal offset matrix for international netting of trades under ISDA Master Agreements for credit calculation and control.
US Tax Planning for International Operations:
Counseled offshore reinsurers on compliance with US tax planning (XL Capital, Ariel Re, Global Indemnity, Tempest Re, Marilla Reinsurance Ltd), avoidance of Permanent Establishment, and ceding to an offshore affiliate (avoid taxation of investment income on ceded reserves). Structured and advised a global derivatives dealer to avoid double tax exposure, including negotiating a bilateral Advance Pricing Agreement with IRS and Inland Revenue (now HMRC). Formed and privately-placed a Bermuda property cat reinsurer avoiding ownership attribution tax problems when co-investing in limited partnerships with other US Persons. Tax-structured with the seller the acquisition of a German reinsurer over time to avoid capital gains tax. More efficiently structured internal and 3rd party reinsurance prior to quota share reinsurance to an offshore affiliate for tax planning on investment income on ceded reserves (the Bermuda Advantage). Substituted three NY domestic insurers for three national insurers for franchise tax savings.
Life and Annuity Re/Insurance, including Variable: Compliance work for a life run-off re/insurance aggregator; drafted variable deferred annuities, variable universal life and private placement memoranda for offshore Private Placed Life Insurer.
Managing General Underwriter & Program Manager: Formation, licensing, dis/engagement with insurers, moving books of business, and fronting until fully licensed.
Investment Advisors: Created an exempt advisor within a reinsurer’s Investment Department to advise cedents. Bought/advised a registered advisor for the same purpose.
Yellow Book: Mastery of key elements of the NAIC annual statement. Mastery of regulated investment law including maximum investments in insurer subsidiaries (stacking) to financially engineer the holding company system. Used intercompany reinsurance pooling to maximize RBC scores and spread any group member’s weakness among stronger members (agency receivables, reinsurance recoverables, non-admitted reinsurance penalties).
Insurance and Credit Rating Agency Interaction: Crafted presentations to AM Best, S&P and Moody’s regarding re/insurer results and initiatives, including Moody’s requiring a triple A Financial Guarantee insurer owned by a lesser rated parent to have public float to enhance shareholder decoupling to preserve the triple A rating, if needed. Ultimately spun-off.
SEC, DOJ, AG and DOI Investigations and Prosecutions:
Managed the defense of an aviation insurance underwriter/claim handler subsidiary convicted of mail fraud arising from an allegedly improper allocation of liability for an aviation disaster between ground security and the airline. Overturned at the Second Circuit a conviction and 5-year jail term for the CEO and a $20Mil corporate fine. Defended associated civil suits and administered the By Law indemnity and corporation-supplied defense of management facing unwarranted criminal charges.
Defended allegations by the NY Attorney General of price-fixing and bid-rigging linked to contingent commissions – PSAs (closed without further action), the follow-on class action suits by insurance buyers (settled for cost of defense) and associated regulatory inquiries of state DOI and Attorneys General (closed without further action).
Defended an inquiry by SEC regarding finite reinsurance, lack of risk transfer, and allegedly improper use of offshore reinsurance (closed without further action).
Defended a SEC/DOJ inquiry regarding alleged bid-rigging in the pricing of Guaranteed Investment Contracts purchased by municipalities to invest bond proceeds.
Defended and settled an antitrust suit brought by 22 Attorneys General and companion class action suits against Hartford Fire, ISO, RAA and reinsurers for the alleged boycott of two forms of insurance (occurrence form; pollution exclusion).
Insurance Product Development: Combined derivatives and reinsurance features.
Created Board Tutorials for Director Education:
Corporate Reserving by actuaries and finance for Loss and Loss Adjustment Expense (versus case-based estimates developed by the claims department);
Profitability of Combined Ratios Over 100 on long tail lines (time value; operating versus underwriting ratios; ability of long tail Accident Year premium over time to self-finance combined ratios over 100); and
How Credit Default Swaps are essentially financial guarantee insurance, and thus might have been hedged on a portfolio basis rather than via derivatives or securities trades.
Created annotated Workers Compensation policy comparing policy language on the left side to its real meaning in plain English on the right side, along with underwriting tips.
Public Company Corporate Secretary and Governance: 11 years as public company General Counsel and Secretary at four re/insurance groups. Also General Counsel of mutual, privately-held and private-equity-owned insurers.
Dispute Resolution: Arbitrator certified by AAA, FINRA and ARIAS. Managed a baseball-style arbitration using a single actuary to resolve a $2 Billion final purchase price adjustment after three years of post-closing development. Supervised arbitrations of risk reinsurance and financial reinsurance for disputes as much as $100 Million.
Arbitrator and Umpire: Insurance and Reinsurance disputes, life and property/casualty. Reinsurance pricing of YRT dispute; claim administrator allegedly liable for adverse warranty claim handling; collection actions on loss-sensitive WC policies.
Expert Witness: Analyzed credit re/insurance portfolio transfers; defended program administrator against liability for adverse claim results; defended facultative reinsurance against E&O liability of insurers presented as if contractor liability claims; assisted class action by life agents deprived of persistency commissions on reinsured book in run-off.
Member of Enterprise Risk Management Committees: drafted Codes of Conduct, Conflict of Interest guidelines, and training programs for public and private companies.
Troubleshooting of Frauds Against the Company:
Deconstructed the Unicover Managers program that induced life reinsurers to provide cheap reinsurance of Workers’ Compensation exposures re-packaged as if merely accident & health coverage, saving employer $500 Million of additional underwriting loss.
Deconstructed a taxicab and livery vehicle master policy/certificate form and rate fraud against a NY auto insurer; fraudsters were later convicted of income tax evasion.
Deconstructed an auto insurance fraud involving Lojack theft devices, local police and suspect insurance transactions in Argentina.
Department of Insurance Matters:
Withdrew licensed insurance group from Massachusetts to avoid untenable residual auto market assessments (CAR) that overwhelmed profitable lines of business. Negotiated a resolution with the DOI, Agents and the Commonwealth’s Attorney General.
Created three single state NY insurers to insure prospectively and assumption reinsure and novate the inforce and expired NY business of a group’s three national insurer affiliates, saving $3Million of annual franchise tax assessed against a portion of the national insurers’ surplus that purportedly was earned from those national insurers’ NY business.
Defended an adverse development reinsurance contract (protecting a Deferred Tax Asset) from New York DOI allegations of insufficient risk transfer.
Defended allegations by NY DFS of noncompliance with OFAC trade sanctions.
Unique Reinsurance: Structured fronting arrangements for captive reinsurers; created a Bermuda Side-Car for property catastrophe reinsurance when cat modeling and rating agency risk charges changed materially after Katrina in 2005; structured a securitization alternative to raise less expensive funds needed for Bermuda reinsurers’ Regulation 114-type trusts securing credit for non-US reinsurance; and developed an Adverse Development reinsurance cover with sufficient risk-transfer to preserve a Deferred Tax Asset during times of losses until utilized to offset taxes on eventual profits.
Claim Department: Managed the Claim Department of a national insurer with a significant runoff book of Professional Liability, Construction Defect and Workers’ Compensation policies using Third Party Administrators as claims adjudicators.
Consultant and Acting General Counsel: To CEO of national insurer for underwriting, regulatory, use of Managing General Underwriters, ERM, claims run-off, management of TPA-based claims department, and reinsurance dispute resolution.
Interim General Counsel: To one international insurer during a maternity leave and to a second one during a medical leave. Handled NY Department of Financial Services inquiry into alleged non-compliance with OFAC sanctions; expanded London-based operations into Continental Europe via passporting for services and establishment; created, qualified and passported a UK property-casualty insurer as the new international platform joining a Lloyd’s syndicate and a UK Branch used for US business.
Commercial Casualty Underwriter: Underwrote paid-loss retro Workers Compensation, High Deductible Liability, and traditional liability and excess coverage. Later, as lawyer, developed and collected under program agreements and collateral arrangements.