Noncontrolling interests

9 Months Ended

Sep. 30, 2015

Noncontrolling Interest Disclosure [Text Block]

7. Noncontrolling Interests

In March 2013, the Company formed, with other third party investors, Lorenz Re Ltd. (Lorenz Re), a Bermuda domiciled special purpose insurer. Lorenz Re is a segregated cell company under the laws of Bermuda and distinct segregated accounts are formed and capitalized within Lorenz Re in order to enter into reinsurance agreements with the Company on a fully collateralized basis.

In 2013, Lorenz Re issued non-voting redeemable preferred share capital on behalf of two segregated accounts (2013 segregated accounts) to provide additional capacity to the Company for a diversified catastrophe portfolio over a multi-year period on a fully collateralized reinsurance basis. The Company determined that it was the primary beneficiary of the 2013 segregated accounts given it had a controlling financial interest in their activities and, accordingly, the 2013 segregated accounts were consolidated by the Company. In April 2015, following the expiration of the multi-year period, a portion of the preferred shares was redeemed and a full commutation of the portfolio in the 2013 segregated accounts back to the Company is expected to occur in 2016.

During the three months ended June 30, 2015, Lorenz Re issued non-voting redeemable preferred share capital on behalf of newly formed segregated accounts (2015 segregated accounts) related to new reinsurance agreements for a diversified catastrophe portfolio and an agriculture portfolio with the Company on a fully collateralized basis. The Company has determined that it is not the primary beneficiary of the 2015 segregated accounts as it does not have a controlling financial interest and, accordingly, the 2015 segregated accounts are not consolidated by the Company.

At September 30, 2015 and December 31, 2014, the assets of Lorenz Re, that are included in the Company's Condensed Consolidated Balance Sheets, were $42.4 million and $100.8 million, respectively, primarily consisting of investments and cash. At September 30, 2015, the liabilities of Lorenz Re, that are included in the Company's Condensed Consolidated Balance Sheets, were $8.3 million, primarily consisting of other reinsurance balances payable and unpaid losses and loss expenses. At December 31, 2014, such liabilities were $13.1 million, primarily consisting of unearned premiums, unpaid losses and loss expenses and other reinsurance balances payable. These balances relate to the 2013 segregated accounts that the Company continues to consolidate. The assets of Lorenz Re can only be used to settle the liabilities of Lorenz Re and there is no recourse to the Company for any liabilities of Lorenz Re.

The reconciliation of the beginning and ending balance of the noncontrolling interests in Lorenz Re for the nine months ended September 30, 2015 and 2014 was as follows (in thousands of U.S. dollars):



	For the nine months ended
	September 30, 2015			September 30, 2014
Balance at beginning of period	$	55,501		$	56,627
Net income attributable to noncontrolling interests	2,531			9,914
Distribution to noncontrolling interests	(55,820		)	(14,265		)
Balance at end of period	$	2,212		$	52,276