“Designed to provide the highest degree of safety, security, and assurance of timely payment.”
Investors Guaranty Assurance, Ltd. (“IGA”) is a limited liability insurance company incorporated and continuously operating in Bermuda since 1998. IGA is a life and assurance insurer. IGA is subject to the IGF Act and is, by law, a wholly-owned subsidiary of IGF.
- A principal source of funding for IGA is the issuance of Adjustable Rate GIA™, its highly rated floating rate senior secured debt obligations. These instruments are of a proprietary design and are the subject of international patents.
- IGA does not manage assets for any party other than itself. Proceeds from the issuance of Adjustable Rate GIA™ and other financial instruments are invested in its applicable government securities portfolios supporting payment of principal and interest on such instruments, as well as in diversified portfolios of various asset classes. IGA’s expectation is to actively manage its assets and liabilities to produce a positive spread, i.e. a return to specific classes of preferred equity holders, including IGF. IGA’s capital and surplus is allocated among its common (by law, only IGF) and preferred equity holders.
- IGA’s asset and liability management are the responsibility of the management team.
- IGA operates its insurance and annuity/Adjustable Rate GIA™ activities in accordance with the strict provisions of the IGF Act, including the maintenance of its statutory reserved assets with government approved custodians. Its financial statements are reported under Bermuda statutory accounting to the Bermuda Monetary Authority, and it operates its statutory reserve structure consistent with Canadian GAAP for Canadian life insurers. This reporting methodology results in the following:
- IGA may only issue insurance contracts with a stated maximum claims payment and must, by law, maintain sufficient assets to fully pay the maximum of its policy obligations. IGA satisfies this legal requirement by maintaining portfolios of government obligations matched to currency and timing of payment to assure its ability to pay all claims payments, including principal and interest payments on its Adjustable Rate GIA™ contracts; and
- Where an obligation cannot be defined currently, but may be determined in the future, such as the interest crediting rate in excess of the lifetime floor for Adjustable Rate GIA™, IGA establishes a reserve from which to increase its government securities portfolio upon the establishment of an annual interest crediting rate. This “discretionary excess interest reserve” along with IGA’s capital and surplus available to support establishment of interest crediting rates between applicable market caps and floors, is invested on a diversified basis. These assets do not collateralise the Adjustable Rate GIA™ contracts, as its portfolios of government securities do, and must by law, always be sufficient to timely pay all claims payments, as well as principal and interest payments on all Adjustable Rate GIA™ issued.