XML 41 R24.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Statutory Capital and Surplus | 12 Months Ended
--- | ---
Dec. 31, 2021
Insurance [Abstract] |
Statutory Capital and Surplus | Statutory Capital and Surplus White Mountains’s insurance operations are subject to regulation and supervision in each of the jurisdictions where they are domiciled and licensed to conduct business. Generally, regulatory authorities have broad supervisory and administrative powers over such matters as licenses, standards of solvency, premium rates, policy forms, investments, security deposits, methods of accounting, form and content of financial statements, minimum capital and surplus requirements, dividends and other distributions to shareholders, periodic examinations and annual and other report filings. In general, such regulation is for the protection of policyholders rather than shareholders. The Insurance Act 1978 of Bermuda and related regulations, as amended (“Insurance Act”), regulates the insurance business of Bermuda-domiciled insurers. Under the Insurance Act, insurers are required to maintain available statutory capital and surplus at a level equal to or in excess of its enhanced capital requirement which is established by reference to either a Bermuda Solvency Capital Requirement (“BSCR”) model or an approved internal capital model. Generally, the Bermuda Monetary Authority (“BMA”) has broad supervisory and administrative powers over such matters as licenses, standards of solvency, investments, methods of accounting, form and content of financial statements, minimum capital and surplus requirements, and annual and other report filings. HG Global/BAM HG Re is a Special Purpose Insurer under Bermuda insurance regulations and is subject to regulation and supervision by the BMA. As of December 31, 2021, HG Re had statutory capital and surplus of $760.0 million. As a Special Purpose Insurer, HG Re has a nominal minimum regulatory capital requirement of $1. BAM is domiciled in New York and is subject to regulation by the NYDFS. New York financial guarantee insurance law establishes single risk and aggregate limits with respect to insured obligations insured by financial guarantee insurers. BAM’s statutory net income (loss) for the years ended December 31, 2021, 2020 and 2019 was $(49.3) million, $(59.3) million and $(38.3) million. BAM’s statutory surplus, as reported to regulatory authorities as of December 31, 2021, was $298.1 million, which exceeds the minimum statutory surplus necessary for BAM to maintain its New York State financial guarantee insurance license of $66.0 million. Ark Syndicates 4020 and 3902 are subject to oversight by the Council of Lloyd’s. Ark Syndicate Management Limited (“ASML”) is authorized by the U.K.’s Prudential Regulation Authority and regulated by the Financial Conduct Authority under the Financial Services and Markets Act 2000. The underwriting capacity of a Member of Lloyd’s must be supported by providing a deposit in the form of cash, securities or letters of credit in an amount determined under the capital adequacy regime of the U.K.’s Prudential Regulation Authority (the “PRA”). This amount is determined by Lloyd’s and is based on each syndicate’s solvency and capital requirement as calculated through its internal model. In addition, if the Funds at Lloyd’s are not sufficient to cover all losses, the Lloyd’s Central Fund provides an additional discretionary level of security for policyholders. As of December 31, 2021, Ark had provided Funds at Lloyd’s of $343.6 million. GAIL is subject to regulation and supervision by the BMA. As of December 31, 2021, GAIL had statutory capital and surplus of $780.3 million. GAIL’s minimum statutory capital and surplus requirement established by the BMA was $288.2 million as of December 31, 2021. Dividend Capacity There are no restrictions under Bermuda law or the law of any other jurisdiction on the payment of dividends from retained earnings by White Mountains, provided that after the payment of any dividend, the Company would continue to be able to pay its liabilities as they become due and the realizable value of the Company’s assets would remain greater that its liabilities. Following is a description of the dividend capacity of White Mountains’s reinsurance and other operating subsidiaries: HG Global/BAM As of December 31, 2021, HG Global had $619.0 million face value of preferred shares outstanding, of which White Mountains owned 96.9%. Holders of the HG Global preferred shares receive cumulative dividends at a fixed annual rate of 6.0% on a quarterly basis, when and if declared by HG Global. During 2021, HG Global declared and paid a $22.0 million preferred dividend, of which $21.3 million was paid to White Mountains. As of December 31, 2021, HG Global had accrued $414.7 million of dividends payable to holders of its preferred shares, of which $400.5 million was payable to White Mountains and eliminated in consolidation. As of December 31, 2021, HG Global and its subsidiaries had $3.1 million of cash outside of HG Re. HG Re is a Special Purpose Insurer subject to regulation and supervision by the BMA, but does not require regulatory approval to pay dividends. However, HG Re’s dividend capacity is limited to amounts held outside of the Collateral Trusts pursuant to the FLRT with BAM. As of December 31, 2021, HG Re had $760.0 million of statutory capital and surplus and $852.0 million of assets held in the Collateral Trusts pursuant to the FLRT with BAM. On a monthly basis, BAM deposits cash equal to ceded premiums, net of ceding commissions, due to HG Re under the FLRT directly into the Regulation 114 Trust. The Regulation 114 Trust target balance is equal to gross ceded unearned premiums and unpaid ceded loss and LAE, if any. If, at the end of any quarter, the Regulation 114 Trust balance is below the target balance, funds will be withdrawn from the Supplemental Trust and deposited into the Regulation 114 Trust in an amount equal to the shortfall. If, at the end of any quarter, the Regulation 114 Trust balance is above 102% of the target balance, funds will be withdrawn from the Regulation 114 Trust and deposited into the Supplemental Trust. The Supplemental Trust Target Balance is $603.0 million, less the amount of cash and securities in the Regulation 114 Trust in excess of its target balance. If, at the end of any quarter, the Supplemental Trust balance exceeds the Supplemental Trust Target Balance, such excess may be distributed to HG Re. The distribution will be made first as an assignment of accrued interest on the BAM Surplus Notes and second in cash and/or fixed income securities. As the BAM Surplus Notes are repaid over time, the BAM Surplus Notes will be replaced in the Supplemental Trust by cash and fixed income securities. As of December 31, 2021, the Collateral Trusts held assets of $852.0 million, which included $481.7 million of cash and investments, $364.6 million of BAM Surplus Notes and $5.7 million of interest receivable on the BAM Surplus Notes. As of December 31, 2021, HG Re had $9.4 million of cash and investments and $116.8 million of accrued interest on the BAM Surplus Notes held outside the Collateral Trusts. Through 2024, the interest rate on the BAM Surplus Notes is a variable rate equal to the one-year U.S. Treasury rate plus 300 basis points, set annually. During 2022, the interest rate on the BAM Surplus Notes will be 3.2%. Beginning in 2025, the interest rate will be fixed at the higher of the then current variable rate or 8.0%. BAM is required to seek regulatory approval to pay interest and principal on the BAM Surplus Notes only to the extent that its remaining qualified statutory capital and other capital resources continue to support its outstanding obligations, business plan and its “AA/stable” rating from Standard & Poor’s. No payment of principal or interest on the BAM Surplus Notes may be made without the approval of the NYDFS. In December 2021, BAM made a $33.8 million cash payment of principal and interest on the BAM Surplus Notes held by HG Global. Of this payment, $23.6 million was a repayment of principal held in the Supplemental Trust, $0.4 million was a payment of accrued interest held in the Supplemental Trust and $9.8 million was a payment of accrued interest held outside the Supplemental Trust. In December 2020, BAM made a $30.1 million cash payment of principal and interest on the BAM Surplus Notes held by HG Global. Of this payment, $21.5 million was a repayment of principal held in the Supplemental Trust, $0.2 million was a payment of accrued interest held in the Supplemental Trust and $8.4 million was a payment of accrued interest held outside the Supplemental Trust. In January 2020, BAM made a one-time $65.0 million cash payment of principal and interest on the BAM Surplus Notes held by HG Global. Of this payment, $47.9 million was a repayment of principal held in the Supplemental Trust, $0.9 million was a payment accrued interest held in the Supplemental Trust and $16.2 million was a payment of accrued interest held outside the Supplemental Trust. Ark During any 12-month period, GAIL, a class 4 licensed Bermuda insurer, has the ability to (i) make capital distributions based on 15%of its total statutory capital per the previous year’s statutory financial statements, or (ii) make dividend payments based on 25% of its total statutory capital and surplus per the previous year’s statutory financial statements, without prior approval of Bermuda regulatory authorities. Accordingly, White Mountains expects GAIL will have the ability to make capital distributions of $113.6 million during 2022, which is equal to 15% of its December 31, 2021 statutory capital of $757.6 million, subject to meeting all appropriate liquidity and solvency requirements and the filing of its December 31, 2021 statutory financial statements. During 2021, GAIL did not pay a dividend to its immediate parent. As of December 31, 2021, Ark and its intermediate holding companies had $4.0 million of net unrestricted cash, short-term investments and fixed maturity investments outside of its regulated and unregulated insurance and reinsurance operating subsidiaries. During 2021, Ark did not pay any dividends to its immediate parent. NSM During 2021, NSM distributed $8.0 million to unitholders, substantially all of which was paid to White Mountains. As of December 31, 2021, NSM had $22.3 million of net unrestricted cash and short-term investments. Kudu During 2021, Kudu distributed $19.4 million to unitholders, substantially all of which was paid to White Mountains. As of December 31, 2021, Kudu had $16.9 million of net unrestricted cash and short-term investments. Other OperationsDuring 2021, White Mountains paid a $3.1 million common share dividend. As of December 31, 2021, the Company and its intermediate holding companies had $453.5 million of net unrestricted cash, short-term investments and fixed maturity investments, $261.6 million of MediaAlpha common stock and $170.5 million of private equity funds and ILS funds.

X
- References No definition available. + Details
Name: | us-gaap_InsuranceAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition This element represents the details related to statutory capital requirements, dividend capacity and the safety reserve. + References No definition available. + Details
Name: | wtm_StatutoryCapitalAndSurplusDisclosureTextBlock
Namespace Prefix: | wtm_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration