Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Event

Bellemeade Re 2023-1 Ltd.

In October 2023, the Company’s U.S. mortgage insurance subsidiaries entered into an aggregate excess of loss reinsurance agreement with Bellemeade Re 2023-1 Ltd. (“Bellemeade 2023-1”), a special purpose reinsurance company domiciled in Bermuda. The Bellemeade 2023-1 agreement provides for up to $233 million of aggregate excess of loss reinsurance coverage at inception in excess of $62 million of aggregate losses for new delinquencies on a portfolio of in-force policies primarily issued from January 2023 through September 2023. The coverage amount decreases over a ten-year period as the underlying covered mortgages amortize.

Bellemeade 2023-1 financed the coverage through the issuance of mortgage insurance-linked notes in an aggregate amount of approximately $187 million to unrelated investors (the “Notes”) and an additional $46 million capacity was provided directly to Arch MI U.S. by a separate panel of reinsurers. The maturity date of the Notes is October 25, 2033. The Notes will be redeemed prior to maturity upon the occurrence of a mandatory termination event or if the ceding insurers trigger a termination of the reinsurance agreement following the occurrence of an optional termination event. All of the proceeds paid to Bellemeade 2023-1 from the sale of the Notes were deposited into a reinsurance trust as security for Bellemeade 2023-1’s obligations. At all times, funds in the reinsurance trust account are required to be invested in high credit quality money market funds.

Letter of Credit Facility AgreementOn October 25, 2023, Arch Re Bermuda entered into Amendment No. 3 and Joinder to the Letter of Credit Facility Agreement with Lloyds Bank, which amends the Letter of Credit Facility Agreement, dated as of November 3, 2020, as amended by Amendment No. 1 to Letter of Credit Facility Agreement dated as of October 29, 2021 and as further amended by Amendment No. 2 and Joinder to Letter of Credit Facility Agreement dated as of October 27, 2022 (the “Existing LOC Agreement”). The Existing LOC Agreement, as amended by Amendment No. 3 (the “Amended LOC Agreement”), provides for a $530 million facility for letters of credit in respect of Tier 2 Funds at Lloyds. As of October 25, 2023, $530 million face amount of letters of credit had been issued under this facility. T