Aetna has entered into a four-year reinsurance arrangement with Vitality Re IX Limited as part of its long-term capital management strategy.
In a statement, Aetna said that the arrangement allows it to reduce its required capital and provides $200 million of collateralized excess of loss reinsurance coverage on a portion of Aetna's group commercial health insurance business.
Vitality Re IX Limited, a newly formed insurance company, issued health insurance-linked notes in a private offering in connection with this transaction.
The agreement "marks the successful completion of our ninth reinsurance arrangement under the Vitality Re program," said Aetna's treasurer, David Buda. "The Vitality Re program remains an integral component of our capital structure by lowering our cost of capital and driving capital efficiency."