ISDA Publishes Wind Event Swap Confirmation Documentation
The International Swaps and Derivatives Association, Inc. (ISDA) today announced the publication of the ISDA US Wind Event Confirmation template, which standardizes natural catastrophe swaps referencing US Wind Events.
The template enables users to hedge against losses from natural catastrophes or to gain exposure to new risk taking opportunities. The document applies to US wind events but can be used by counterparties globally.
"The benefits of standardized documentation are well established and working with our members to standardize documentation is one of ISDA's central goals," said Katherine Darras, general counsel, Americas, ISDA. "Standardizing natural catastrophe swaps is yet another step forward by ISDA toward greater transparency and certainty in the OTC industry."
The ISDA US Wind Event Confirmation facilitates, among other things, increased pricing transparency and product liquidity to a rapidly increasing market as well as increasing certainty and reducing ambiguity around terms. The template provides standard definitions for key terms such as Risk Period, Extension Threshold, Termination Date and a menu of standardized choices for USA Wind Event. It is anticipated that the template will be utilized by insurance market participants, investors and corporate end users.
