» Common Terms and Definitions
|13 Terms found.|
|ARe  |
Associate in Reinsurance
|Ceding Commission  |
Credited to the reinsured against the reinsurance premiums to reimburse the reinsured for its underwriting and issuing expenses.
|Ceding Company  |
Purchases reinsurance and is an insurance company that transfers premiums and losses to the reinsurer.
|Cut-Through Endorsement  |
Guarantees that a reinsurance company will pay losses incurred by a Third Party even though that Third Party has no contractual arrangement with the reinsurer.
|ECO Clause  |
In a reinsurance treaty, the clause that protects the ceding company against all or part of its liability from claim settlement activities that are outside of policy provisions.
|Finite Reinsurance  |
Finite reinsurance spread risk over time and generally take into account the investment income generated over the period. To be considered reinsurance for accounting purposes, a reinsurance contract must involve some transfer of risk to the reinsurer. If there is insufficient risk transfer, the transaction is considered a financing mechanism and is booked as a loan or liability instead of an asset.
|IRUA  |
Intermediaries and Reinsurance Underwriters Association
|PORC  |
Producer-Owned Reinsurance Captive
|Pro Rata Reinsurance  |
A reinsurance agreement in which the insurer shares premiums n the same proportion as losses.
|Producer-Owned Reinsurance Captive  |
This is a type of captive reinsurance company that underwrites risks of an affiliated operating business by means of having those risks first directly underwritten by a fronting insurance company which then cedes those risks on through to the captive as reinsurer. The insurance is "producer-owned" in the sense that the producer of the initial insurance contract owns the captive. In some instances, this type of reinsurance company is owned by an insurance agent and broker, in which case, it is not technically-speaking a captive insurer since it is not owned by the owners of the affiliated operating company.
|Quota Share Reinsurance  |
A form of automatic reinsurance that requires the Insurer to transfer and the Reinsurer to accept a previously agreed percentage of every risk within a defined category of business written by the Insurer.
|Retrocession  |
The transaction of a reinsurer that shares some of its reinsurance risk with another reinsurer. The reinsurer, in effect, transfers a portion of its obligations acquired through a reinsurance transaction.
|Ultimate Net Loss  |
In liability insurance, the amount actually paid or payable for the settlement of a claim for which the reinsured is liable (including or excluding defense costs), after deductions are made for recoveries and certain specified reinsurance