Clear Blue, New U.S. Commercial Insurance Fronting Operation, Opens for Business

December 15, 2015

A newly-formed commercial insurance fronting provider, Clear Blue Financial Holdings LLC, said it has officially launched with two fully-licensed fronting carriers and will begin servicing clients immediately.

To launch its fronting operation, Puerto Rico-based Clear Blue Financial Holdings last month acquired two specialty insurance companies as shells. It acquired RLI Indemnity Co. from Mt. Hawley Insurance Co. for $ 7.5 million in cash, and also bought Maiden Specialty Insurance Co. from Bermuda-based Maiden Holdings Ltd.

RLI Indemnity Co. has been renamed Clear Blue Insurance Co. and will serve as the licensed admitted carrier while Maiden Specialty Insurance Co. has been renamed Clear Blue Specialty Insurance Co. and will serve as the licensed non-admitted or excess and surplus lines carrier. Both are licensed in 49 states and the District of Columbia.

As a fronting carrier, Clear Blue is a non-risk bearing insurance entity that enables traditional and alternative reinsurers to access the onshore U.S. market through use of its program management services, licenses and rating. It is offering primary or excess policy issuance and program management capabilities.

A.M. Best has assigned a financial strength rating of A-(Excellent) and the issuer credit ratings of “a-” to Clear Blue Insurance Co. Inc.(Chicago)and Clear Blue Specialty Insurance Co. (Charlotte, N.C.). It assigned a stable outlook to both ratings.

The Clear Blue operation is being backed by Pine Brook, a private equity firm that invests primarily in energy and financial services businesses including Third Point Reinsurance and Fidelis Insurance Holdings.

Clear Blue was founded by a management team led by President and CEO Jerome Breslin, who built Bank of America’s commercial insurance division and who was with AmTrust from 2009-2012. Before that, he was with AIG and Standard Insurance Co.

Breslin is joined by Chief Risk Officer Jim Mann and Chief Operating Officer Peter Klope, both of whom worked with Breslin at Bank of America.

Completing the management team are Jeff Downey, formerly with TAG Financial Institutions Group and The Kilbourn Group, as chief financial officer; Manuel Lebron, formerly with One Alliance Insurance Corp., QBE Insurance in Puerto Rico, and Universal Insurance as senior vice president of finance; and Scott Palladino, who has been with Patriot Underwriters and Sompo Japana Nipponkoa America, as senior vice president.

Breslin said Clear Blue will provide both traditional and alternative capital backed reinsurers access to the onshore U.S. insurance market.

“The commercial insurance market is in need of A- rated and licensed fronting capacity and we strongly believe that our underwriting expertise and operational capabilities, coupled with our longstanding industry relationships, will enable Clear Blue play an important role in meeting growing demand,” he said in the announcement.

Clear Blue will be headquartered in Charlotte, North Carolina.

“We are confident that the Clear Blue team has found a very interesting segment of the insurance market,” said William Spiegel, founding partner and managing director of Pine Brook’s financial services investment team.

A similar fronting operation, Spinnaker Insurance Co., launched in Chicago in October. Spinnaker is a subsidiary of Sojourner Holding Co. LLC, which, according to documents filed with the Securities Exchange Commission, is incorporated in Delaware and located in Chester, N.J. Spinnaker is specializing in sourcing small to medium sized market risks from managing general agent programs with a focus on U.S. catastrophe-exposed program business. Spinnaker has said it will also provide service as a fronting insurer for short-tail business.

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Latest Comments

  • December 15, 2015 at 2:59 pm
    david kodama says:
    the non-admitted or excess and surplus lines carrier would generally not be a licensed insurer in the states where it writes surplus lines insurance.
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