Arent Fox Counsels Clear Blue on Launch of New Insurance Platform
Clear Blue is a newly-formed commercial insurance fronting provider that through its wholly-owned subsidiaries offers fronting and related services to the US insurance marketplace. As a fronting carrier, Clear Blue is a non-risk bearing insurance business that enables traditional and alternative reinsurers to access the on-shore US market through use of Clear Blue's program management expertise, licenses and A.M. Best rating.
The combined carrier group has received an A.M. Best rating of A- (Excellent). The Companies are backed by Pine Brook, a private equity firm with deep financial services and insurance sector expertise.
“More hedge funds and private equity groups are entering the insurance and reinsurance market today because there is less correlated economic risk,” said Elliott M. Kroll, lead Arent Fox partner on the transaction. “Many of the insurance and reinsurance vehicles formed by hedge funds and private equity firms are offshore and need a vehicle to assume risk in the United States. Clear Blue has capacity and an excellent rating to service that slice of the market.”
Mr. Kroll and associate Andrew Dykens provided regulatory counsel to Clear Blue and will serve as corporate advisors for the company going forward. In the launch of its new insurance platform, Mr. Kroll and Mr. Dykens secured approval for Clear Blue’s acquisition of two insurers, one in Illinois and one in North Carolina, handling all regulatory and compliance issues (state and federal) pre- and post-closing.
Additionally, TAG Financial Institutions Group raised capital to finance the business, identified and advised on the acquisition of the two insurance subsidiaries, and advised on aspects of the rating and regulatory processes. “Another important aspect of this venture is the powerful executive team that Clear Blue has assembled,” Mr. Kroll continued.
Clear Blue was founded by a highly experienced management team led by President and CEO Jerome Breslin, who built Bank of America's commercial insurance division. He is joined by Chief Risk Officer Jim Mann and Chief Operating Officer Peter Klope, both of whom worked with Breslin at Bank of America. The management team is rounded out with Jeff Downey, former TAG Financial Principal, Manuel Lebron and Scott Palladino, all of whom bring significant experience in the P&C industry to the Clear Blue team. Steven Nigro, Managing Partner of TAG Financial has been named to the Board of Directors of Clear Blue.
Mr. Kroll represents clients nationally and internationally in all major areas of the insurance industry spanning the life and nonlife areas including property and casualty, aviation/space, accident, and health. In addition, he has in-depth experience with premium financing, captives, financial and structured reinsurance transactions, and regulatory representation.
Arent Fox’s Insurance & Reinsurance practice advises US and European insurers, reinsurers, and brokers on multistate licensing projects, payment of Federal Excise Tax, regulatory compliance matters, and investigations in a number of states. The team counsels clients on cross-border acquisitions including difficult employment issues for public companies. The firm also advises US and international insurers and producers on compliance, Market Conduct Examinations, licensing, and surplus lines eligibility issues. The practice’s attorneys are experienced in crafting new forms of insurance and drafting reinsurance and producer agreements.