Admissible Assets
Assets that regulators accept as valid collateral backing insurance and reinsurance obligations.
Admissible assets are the assets that a financial regulator — such as the BMA under Bermuda's Insurance Act 1978 — accepts as qualifying collateral backing insurance and reinsurance liabilities. Not all assets are admissible: regulators specify approved categories to ensure that collateral is liquid, low-risk, and genuinely available to pay claims.
In traditional ILS, collateral held in cat bond SPV trusts is typically invested in US Treasury money market funds or similar instruments — these are unambiguously admissible.
For onchain reinsurance, the admissibility of digital asset collateral (e.g. USDC in a smart contract) is a live regulatory question. Stablecoins are not yet explicitly listed as admissible reinsurance collateral under most insurance regulatory frameworks, including Bermuda's. However, the BMA's engagement-first approach means this is an area of active regulatory development.
If digital stablecoin collateral is ultimately recognised as admissible, it would open the door to onchain reinsurance SPVs providing collateralised coverage that is recognised by cedants and reinsurance brokers — a significant step toward mainstream adoption.
Example usage
“A cedant considering accepting reinsurance coverage from an onchain protocol asked its broker whether USDC-collateralised coverage would be treated as admissible under its Bermuda reinsurance contract.”
Frequently asked questions
What is Admissible Assets?
Assets that regulators accept as valid collateral backing insurance and reinsurance obligations. Admissible assets are the assets that a financial regulator — such as the BMA under Bermuda's Insurance Act 1978 — accepts as qualifying collateral backing insurance and reinsurance liabilities. Not all assets are admissible: regulators specify approved categories to ensure that collateral is liquid, low-risk, and genuinely available to pay claims.
How is Admissible Assets used in practice?
A cedant considering accepting reinsurance coverage from an onchain protocol asked its broker whether USDC-collateralised coverage would be treated as admissible under its Bermuda reinsurance contract.
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