Collateralised Reinsurance Structure
Traditional vs OnRe Collateralised Reinsurance Structures
Traditional collateralised reinsurance relies on capital locked in offchain trust structures, with limited transparency, slow settlement, and little to no secondary liquidity. OnRe’s collateralised reinsurance brings the structure onchain, enabling real-time transparency, active collateral management, and secondary market liquidity while maintaining full collateralisation.
Licensing
Licensed (re)insurer in Bermuda or other jurisdiction
Licensed (re)insurer in Bermuda, regulated under both insurance and digital asset regimes
Capitalization
Capital received from investors or reinsurers
Capital received from KYC’d, accredited investors, governed by Participation Agreements
Collateral Holding
Funds placed in a third-party trust account at a commercial bank
Funds held in segregated digital custody, e.g. Coinbase Prime, Safe, or Squads Multi-Sig Wallet
Custody Control
Trustee follows pre-agreed release instructions from cedant
Funds can only be released via multi-signature authorisation under OnRe control
Cedant Control
Cedant may instruct trustee directly on claim event
Cedant can be added as read-only viewer or co-signer in multi-sig for greater transparency/control
Verification of Collateral
Requires trust bank reporting or statement
Anyone can independently verify funds at any time via Blockchain Explorer
Trigger for Release
Release occurs on (i) claim notification by cedant to trustee, or (ii) expiry of trust agreement
Release occurs on (i) verified claim, or (ii) run-off of (re)insurance liabilities
Wording
Standard reinsurance contracts with references to trust
Standard reinsurance contracts, denominated in USD, with reference to digital asset collateral
Segregation of Funds
Trust agreement and bank account administered for benefit of cedant
Statutory segregation under Bermuda SAC Act law; each account ring-fenced and independently capitalised
Cost
Trust fees, legal set-up, bank charges, ongoing administration
No trust needed; reduced complexity and cost via programmable custody controls
Operational Resilience
Dependent on third-party trustee responsiveness and banking hours
Onchain infrastructure operates 24/7; all transactions require multi-party cryptographic approval
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