To the Editor:

There are three key facts readers of “Why Insurers Are Taking Your Money to the Cayman Islands” (October 6, 2025) should know about reinsurance:

• Life insurers pay the benefits. In a reinsurance transaction, a life insurer transfers some risk, but the obligation to pay benefits remains with the life insurer. An individual policyholder will never interact with the reinsurer.
  
  
• Reinsurance is transparent. Transactions are publicly disclosed in a life insurance company’s annual statement. Moreover, state regulators are pursuing enhancements for additional transparency into reinsurance transactions and the assets backing them.
  
  
• Assets remain in the U.S. Of the $75 billion in offshore reinsurance noted in the article, very little has actually left the United States. Most transactions are set up so that the U.S. insurer keeps control of the money that backs these policies. While the responsibility for the risk moves overseas, actual assets usually stay in the United States with the original insurer.

As America’s population ages, consumer demand for long-term financial guarantees will continue to grow. Reinsurance helps life insurers meet this demand. Effective regulation and responsible financial practices protect policyholders regardless of where reinsurance transactions take place.

Sincerely,

David Chavern
President & CEO
American Council of Life Insurers