Sector developments and company hires

Claims predictability to improve?
The Florida legislature last month passed a bill to reform the requirements for the assignment of benefits of claims for residential and commercial property insurance, which could improve the predictability of claims and losses for Florida catastrophe bonds. According to a recent Cadwalader client memo, assignment of benefits in Florida has been a concern for the ILS market, as related litigation has resulted in higher insurance rates and become a significant factor in losses and claims development for a number of outstanding catastrophe bonds. The Act is expected to be effective from 1 July 2019 and could rationalise loss development for Florida catastrophe bonds, as incentives for opportunistic litigation would be reduced while requiring the provision of detailed claims information.

North America
Highland Capital Management has named Joe Sowin co-cio, overseeing investment activities for the firm’s alternative investment platform, with a focus on driving information flow across investment teams and with the firm’s counterparties. Sowin previously served as head of global equity trading and will continue to manage the firm’s trading operations as co-cio. He joined the firm in 2010, after holding various trading positions at New York- and Connecticut-based hedge funds. Sowin joins Highland co-founder Mark Okada in the co-cio role. Trey Parker, a Highland partner who previously held the post alongside Okada, was named co-head of Highland’s private equity group earlier this year.

Alex Patil has joined Monroe Capital’s originations team as md, West Coast region, working with Steve Hinrichs in the firm’s Los Angeles office. Prior to Monroe, Patil was an md at Medley Management, where he led the originations efforts for the West Coast region. He was responsible for deal sourcing, underwriting, transaction execution and portfolio management.

RFC on SPV consolidation
The Australian Prudential Regulation Authority (APRA) has released for consultation proposed changes to reporting requirements for registered financial corporations (RFCs) that are not a related party of an authorised deposit-taking institution (ADI). The changes will require these entities to consolidate the positions and transactions of all securitisation SPVs in a single set of reporting for economic and financial statistics data collection. The assets and liabilities of securitisation SPVs will therefore be consolidated on to the domestic books of RFCs and assets originated into or transferred to an SPV will be included in the RFC’s reporting. The proposed changes are intended to take effect from the reporting period ending 31 July 2019, with feedback welcomed by 1 June.

SOFR-linked MBS
Ginnie Mae has settled the first REMIC tranche indexed to SOFR, representing the culmination of a team effort between the GSE and Amherst Pierpont. The security is a US$40m floating rate tranche, within a US$265m REMIC, backed by adjustable-rate mortgage pools. The interest rate formula includes a spread of 40bp over the SOFR floating rate index value.