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Catastrophe Prevention Drives Insurance Pitch to Clearinghouses

A group of insurers is for the first time offering to shoulder risk for clearinghouses backing hundreds of millions of derivatives trades, proposing more protection in markets where a collapse could cripple the global financial system.

About 20 insurers were brought together by GCSA LLC, a New York-based underwriter, who declined to identify them. They are capable of offering $6 billion to $10 billion of protection to clearinghouses such as CME Group Inc. and LCH.Clearnet Group Ltd., GCSA President Chris Cononico said during an interview.