A wholly owned subsidiary of Bermudian-based insurer Enstar Group Limited has closed a loss portfolio transfer agreement with RACQ Insurance Limited to reinsure 80 per cent of RACQ’s motor vehicle compulsory third-party insurance liabilities, covering accident years 2021 and prior.

Under the reinsurance agreement, which is effective as of July 1, 2022, RACQ will cede net reserves of approximately $235 million, and Enstar’s subsidiary will provide approximately $130 million of cover in excess of the ceded reserves.

The amount of net loss reserves ceded, as well as the settlement and limit amounts provided in the agreement, will be adjusted for claims paid between the effective date and the closing date of the transaction, pursuant to the terms of the contract.

Completion of the transaction followed receipt of regulatory approvals and satisfaction of various other closing conditions.