Reinsurance terminology. Home Term Insurance Definitions reinsurance On This Page.
Reinsurance terminology 8. Long-term care coverage. Quiz Subject. Like other forms of insurance, this is done for a fee and to mitigate overall risk exposure. Learning how these LM2 Reinsurance Terminology - match the description to the phrase. Personal Hygiene and Reinsurance Terminology (1:39) Types of Reinsurance (4:41) Test your Knowledge Checklist Chapter 11 - Round Up (1:23) Refer to Forbes Advisor's health insurance terms glossary to understand medical insurance terms and to clear up confusion about health insurance terminology. More recently, she said, the long-term insurance industry in Bermuda has prioritized innovation to improve its ability to address policyholder needs through the increased use of asset-intensive Basic Technical Reinsurance Accounting ©London School of Insurance 2016 6 ry day terminology. A reinsurance broker acts as an intermediary, either as an individual or a firm, and is compensated with a fee or commission for Homeowners’ Insurance Terminology Here’s a quick guide to some of the key terms you’ll encounter when dealing with homeowners’ insurance issues: • Actual cash value. Browse the manual glossary A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z A-Share Variable Annuity Accelerated The reinsurance treaty attaches when if a ceding insurer incurs losses on a particular line of business during a specific period (usually twelve months) in excess of a stated amount. FY 2015 In a hard market, prices rise, capacity shrinks, and securing reinsurance becomes more expensive. A reinsurance contract typically involves two companies: A reinsurance Treaty reinsurance is insurance purchased by an insurance company from another insurer. A generic term describing reinsurance which, subject to a specified limit, indemnifies the ceding company against all or a portion of the amount in excess of a specified retention. REINSURANCE meaning: insurance bought by an insurance company to protect itself against large demands from its. Managing General Agent Fundamentals of Property and Casualty Reinsurance with a Glossary of Reinsurance Terms Paperback – July 4, 2011 by Reinsurance Association of America (Author) 3. → Direct Insurance. NEXT: The Reinsurance Contract (The complete Fundamentals of Reinsurance with a Glossary of Reinsurance Terms is also available for the Kindle and in hard-copy at Amazon. Firstly, it is incredibly convenient. Also in most jurisdictions insurance companies are allowed to participate in reinsurance. Share this term. Read more about Credit Carried Forward (Reinsurance) - Understanding the Concept. The maximum amount of insurance that an insurance company will carry on any Reinsurance lets insurance companies transfer some or all of the risk from one or more policies to a reinsurance company. Facultative reinsurance is usually purchased by the insurance underwriter who underwrote the original insurance policy, whereas treaty reinsurance is Reinsurance, like other specialized industries, has its own unique terms and phrases that seem foreign to the uninitiated. • Important reinsurance documentation. The most common approach is to cover a certain percentage of claims costs Reinsurance plays a critical role in the world of insurance, acting as a risk management tool that safeguards insurance companies from extreme financial losses. Treaty reinsurance is a type of reinsurance where the insurer and reinsurer enter into a long-term agreement to cover a specific portfolio of risks. First published in 1972 and newly revised in 2016, this booklet reflects the efforts and input of several of the most experienced reinsurance How Reinsurance Works . This paper presents a dictionary of 190 words related to the insurance sector. Claims-Made Reinsurance (Loss Sustained Cover) A type of reinsurance contract covering claims that are first made to the reinsurer during the term of contract, regardless of when they were sustained; a blend of retroactive and prospective reinsurance. F Face value - The initial amount of death benefit provided by the policy as shown on the face page of the contract. Glossary definitions are provided by Robert W. ) “ By far and away the most well rounded and useful Cat-focused industry conference out Glossary of insurance related terms used by Lloyd's and market participants. proper market conduct, fair contract terms, rates The extent of that obligation is defined by the terms and conditions of the applicable reinsurance agreement. An accident is an unexpected or unplanned incident or event that usually causes damage or injury (physical or financial) to the insured or a third party. The LOMA Glossary is an essential tool for understanding principles and communicating accurately with professionals in the financial services industry — and it's available to you online!. e. )• Reinsurers pay the balance of losses that exceed this amount –but only up to a pre-agreed limit. Learn. With the click of a button, you can gain immediate access to valuable Glossary of reinsurance terms • With comments by ERIC A. The terms of a reinsurance transaction are defined in a reinsurance treaty. , the amount retained by the ceding co. Reinsurance is covering the risk taken by the primary insurance Depending on the context this term may refer to: (a) a member’s allocated capacity (b) syndicate allocated capacity, with or without the addition of cover from qualifying quota share reinsurance; (c) the total underwriting capacity of all syndicates combined, with or without the addition of cover from qualifying quota share reinsurance; or (d Study with Quizlet and memorize flashcards containing terms like Accident Year Experience, Account Executive, Acquisition Costs and more. adequacy when business is ceded, including in situations where the assuming company does not submit a Participants will develop familiarity with essential reinsurance terminology, various reinsurance structures (both traditional and non-traditional), and common contractual clauses and claims management—skills crucial for professionals in re/insurance or in financial services and law firms supporting the insurance industry. October 5, 2023 5 min read Definitions Portfolio Runoff in Reinsurance: Understanding the Process Learn about Workers Compensation Catastrophe Policies in reinsurance, a critical excess of loss coverage that primary What is reinsurance? Uncover the basics of this crucial risk management tool and how it helps insurers manage large-scale risks effectively. Glossary Reinsurance_Basics_3E. jennnnn55555. Study with Quizlet and memorize flashcards containing terms like bordereaux, to cede, cedant and more. It usually involves a third party paying part of an insurance company’s claims once they pass a certain amount. FAIR Plan - Fair Access to Insurance Requirements - state pools designed to provide insurance to Some of our previous articles have addressed a few of these terms, such as "Understanding Reinsurance Terminology—Follow-the-Fortunes "(October 2001) and "Sorting Out the Reinsurance Contract Morass" (March of reinsurance are professional reinsurers which are entities exclusively dedicated to the activity of reinsurance. Compare Quotes Gross premium is distinguished from Net premium. However, there was a range of pricing outcomes that varied by region, Search for a specific term. it is not a just a description of words. Term It refers to a specific period during which the What Does Retrocession Mean? Retrocession occurs when one reinsurance company transfers some of its risks to another insurance company. We would like to show you a description here but the site won’t allow us. INTRODUCTION TO PROPERTY AND CASUALTY REINSURANCE Reinsurance is a transaction in which one insurance company indemnifies, for a premium, another insurance company against all or part of the loss that it may sustain under its policy or Whether a reinsurance seasoned vet or new to the field, this is an engaging seminar that addressed specific issues of the reinsurance market. Initially utilized for fire and marine insurance, reinsurance companies have grown through the past century to include almost all facets of the insurance sector. Actuarial Valuation A valuation by an actuary of the present value of future liabilities using probability tables and other statistical techniques to evaluate the long-term business An agreement that allows for certain changes to the terms of an insurance or reinsurance contract to be agreed by the leading underwriter(s) without reference to the following underwriters. The term includes various types of reinsurance, such as catastrophe reinsurance, per risk reinsurance, per occurrence reinsurance, and aggregate excess of loss 1 Page 1 of 18 GLOSSARY OF REINSURANCE TERMINOLOGY Term Definition Accident Year Experience REINSURANCE experience calculated by matching the total value of all losses occurring during a 12-month period with premiums Global insurance and reinsurance broking group Howden has welcomed Haakon AG into its collective power under the name Howden Re Switzerland. Reinsurance Agreement Sample. One of the bedrock doctrines in reinsurance is the concept of follow-the-fortunes. It will explore various types and structures of reinsurance, key principles and terminology, and the numerous reinsurance markets. Provides automatic coverage, hence minimizing administrative effort. Clash Cover (Casualty Catastrophe A generic term describing reinsurance which, subject to a specified limit, indemnifies the reinsured company against all or a portion of the amount of loss in excess of the reinsured's specified loss retention. We will be encountering this problem throughout this chapter. Example: An auto insurer buying treaty reinsurance for all policies in a particular region. This quarter’s Commentary revisits some reinsurance terms of art and explains what they mean and in some cases where they came from. My most recent Reinsurance Commentary has been published by IRMI. Covers a portfolio of policies based on pre-determined terms. reinsurance (noun): Insurance that an insurance company buys from another insurance company to protect itself in the case of risk. Twitter; Facebook; Youtube (855) 372-7400. Net premium is ususally net of reinsurance costs and policy cancellations and endorsements. This requires the cover to be rolled forward at maturity. A percentage derived by dividing reinsurance premium by the reinsurance limit; the inverse is known as the payback or amortisation period. States have some flexibility in terms of how their reinsurance programs are designed and how much of an impact they have on premiums and enrollment. Inspirational Farewell: Navigating the intricacies of reinsurance can be as demanding section have the meanings set forth in the definitions in Part Thirteen of the Reinsurance Agreement and Section I of the Plan. Absolute Liability Reinsurance R A form of insurance that insurance companies purchase for their own protection. Renewal Date R The date your insurance policy expires and the date your renewed policy will begin. The three most common methods of accepting reinsurance are automatic, facultative, and facultative-obligatory. • The terms and conditions have to be negotiated and agreed separately for each risk • Each risk can be ceded proportionally or non-proportionally Corporate PowerPoint Template 04 October 2023 8 Reinsurance types Facultative vs Treaty arrangements • Involves a transfer of portfolio risks, for each risk that meets the agreed treaty Explore insurance terminology with this quiz covering premiums, underwriting, deductibles, reinsurance, and more. Over the next several columns, we will explore some of these reinsurance terms of art and try to make them more understandable. US term for temporary cover used by an insurer, or a reinsurer. , five years) there can be a duration mismatch compared to the liabilities. Premium. The share of 3. The LOMA Glossary is a compilation of definitions from various LOMA courses; however, it is not an assigned study material for any LOMA course. Home Term Insurance Definitions reinsurance On This Page. Reinsurance terminology or jargon is often off-putting. The word used to describe the original insurer passing risks to reinsurers. Insurance Terms Reinsurance Treaty Reinsurance Agreement Ceding Company Reinsurer Treaty Reinsurance Insurance Documentation. Participants must The Reinsurance Association of America (RAA), headquartered in Washington, D. A reinsurance arrangement is usually expressed in terms of “line” meaning that if a ceding company has got a ten-line or twelve-line reinsurance arrangement (TREATY) it can automatically cede or reinsure up to ten times or twelve times of the amount retained. 2. Line: A line is equivalent to retention, i. Usually, the reinsurance intermediary is the broker that placed the risk and participated in the negotiation of the reinsurance contract. There are many insurance terms, words and phrases you should know. Treaty reinsurance is typically a long-term arrangement between carriers and reinsurers. A reinsurance term that defines a body of: 1) insurance (policies) in force (premium portfolio), 2) outstanding losses (loss portfolio), or 3) company investments (investment portfolio). . (“IRMI”) on follow-the-fortunes and follow-the-settlements as part of IRMI’s Expert Commentary series on IRMI. Facultative Reinsurance: Single risk The Alliant Re claims team was designed to bring together a dedicated team of experienced claims advocates with 40 years’ combined experience in broker market reinsurance and direct casualty claims reinsurance broking. Conversely, in a soft market, prices decline, capacity increases, and competition among reinsurers grows. , Columbia, South Carolina 29206 (Telephone 803 The term includes various types of reinsurance, such as catastrophe reinsurance, per-risk reinsurance, per-occurrence reinsurance, and aggregate excess of loss reinsurance. With a clear understanding of reinsurance and its terms like risk transfer, capital management, and Reinsurance Terminology Explained: Bordereau Reinsurance contracts are filled with exotic and equally mind-numbing terms like facultative cer-tificate, follow-the-fortunes, cede, treaty, honor-able engagement, ultimate net loss, and more. That’s why we’ve created this comprehensive guide to help you decode the A contract bond reinsurance term providing that reinsurance attaches at a<br /> specified level of a principal’s total volume of work rather than on the more<br /> conventional basis of individual contract or bond Reinsurance acts as a safety net, providing additional layers of protection to insurance companies and ensuring their long-term viability. This publication should answer many of those questions. Study with Quizlet and memorize flashcards containing terms like Placement, Debit note, Claim and more. The proportion of an insurance or reinsurance risk that is accepted by an insurer. 6 out of 5 stars 19 ratings See our Reinsurance Commentaries, "Reinsurance and Emerging Risks" (June 2013), "Follow-the-Fortunes Updated" (April 2004), and "Understanding Reinsurance Terminology—Follow-the-Fortunes" (October 2001), for example. Fortunately, you don't have to know every insurance term to stay informed. Whether a reinsurance seasoned vet or new to the field, this is an engaging seminar that addressed specific issues of the reinsurance market. GLOSSARY OF REINSURANCE TERMS . Reinsurance for which credit is given for the unearned premiums and unpaid claims in a ceding company’s Annual Statement because the reinsurance is placed in an admitted reinsurance %PDF-1. Flashcards. 162 Glossary catastrophe reinsurance DA form of excess of loss rein-surance that, subject to a specified limit, indemnifies the ceding company for the amount of loss in excess of a Glossary of Reinsurance Terms Useful vocabulary of insurance related terms. The term “sliding scale commission” comes from the structure of the commission payment—it “slides” up or down on a “scale” depending on the changing metric of the loss ratio. Treaty reinsurance covers a broad portfolio of policies under an agreement that automatically includes qualifying risks. A way of calculating how much damages an insured homeowner suffered that takes the replacement Key Terms Part 1 - Key Reinsurance Terms Learn with flashcards, games, and more — for free. indb 161 10/13/2018 10:12:52 PM. The issuing company is called the cedent, while the reinsurer is the purchasing company, which assumes the Reinsurance plays a vital role in the insurance industry, providing insurers with a mechanism to manage risk and enhance their financial stability. Terms in this set (50) Retention Limit. ln its present Extended term insurance option - A policy provision that provides the option of continuing the existing amount of insurance as term insurance for as long a period of time as the contract's cash value will purchase. Box 1520, Athens, Texas 75751. Face Amount: Value of insurance policy. ” Michelle Thimm, Church Mutual Insurance “Re Underwriting provided a comprehensive and interesting overview of underwriting in the current market with a major (and interesting) focus on trends. Due to the complexity of reinsurance treaties it is not uncommon Glossary This glossary provides a listing of actuarial terms, practice area terminology and other definitions related to the actuarial profession. The three most common types of reinsurance treaties are YRT (yearly renewable term), coinsurance, and modified coinsurance. An authority by an underwriter to an agent to grant cover on the underwriter’s behalf (binding authority). Insurance Terminology & Concepts Overview. Categories of risk and benefits of insurance (8:06) A brief history of insurance (21:00) Reinsurance Terminology. . • Reinsured undertakes to pay all losses up to a pre-agreed amount. The Medium-Term Management Plan; Capital Policy and Shareholder Return Policy; Enterprise Risk Management; Corporate Governance; IR Events. A provision in a reinsurance agreement designed to allocate loss from a single occurrence between two or more reinsurance agreements. No results found. Thomas Meier, Co-CEO Howden Re Switzerland and former dressed a few of these terms, such as “Under-standing Reinsurance Terminology—Follow-the-Fortunes ” (October 2001), “Sorting Out the Re-insurance Contract Morass” (March 2002), and “Reinsurancese—Time for a Change?” (March 2008). Events and Conferences. This is an update of a Reinsurance Commentary from some years ago. O. German Browse the manual glossary A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z Salvage Salvage and Subrogation Glossary of Reinsurance Terms. That other insurer is often a specialist in reinsurance. INTRODUCTION TO PROPERTY AND CASUALTY REINSURANCE Reinsurance is a transaction in which one insurance company indemnifies, for a premium, another insurance company against all or part of the loss that it may sustain under its policy or policies of RAA GLOSSARY OF REINSURANCE TERMS. Treaty Reinsurance. Treaty reinsurance can be structured as proportional The average loss occurring for a particular (re)insurance contract, expressed in probabilistic terms (estimated likelihood), as computed by a risk model. Understanding key reinsurance terms and concepts is essential for professionals navigating this complex landscape. Reinsurance where the reinsurance deductible applies to a group of contracts (as opposed to a single contract), for example, a reinsurance contract that pays out when the loss for an entire line The term of a facultative agreement coincides with the term of the policy. – If you purchase a property near a river, the risk of flooding is higher. The act of sharing the risk with reinsurers. It should never be confused with "surplus share," which always refers to a pro rata form of reinsurance. (The complete Fundamentals of Reinsurance with a Glossary of Reinsurance Terms is also available for the Kindle and in hard-copy at Amazon. Contact Us ©2025 Reinsurance Association of America | 202. Quiz. Reinsurance is a CyberCube predicts that advancements in AI will lead to a rise in the frequency of cyber incidents in the near term. Excess of loss reinsurance Reinsurance covering claims only the extent that they exceed a stated amount. The Role of Reinsurance in the Insurance Industry. (Treaty Priority / Deductible. Companies may employ numerous reinsurance transactions with a variety of details. What Does Reinsurance Broker Mean? Put simply, a reinsurance broker functions similarly to an insurance broker, but instead of working with the general public to sell insurance, reinsurance brokers collaborate with insurers to sell reinsurance. Can you beat the clock while doing it? Renew or Reinstate your Membership for 2025 today F. The process of reinsurance involves several key steps: 1 – Risk Assessment: The ceding company identifies the risks it wants to reinsure. Note: While every effort has been made to ensure the reinsurance glossary contains accurate and up-to-date reinsurance and insurance definitions, this glossary should be used only as an educational resource, not as an authority. Strain, CLU, CPCU, and presented with the kind permission of Strain Publishing & Seminars, Inc. Australia; Canada; Definitions; India; Legal; Life Insurance; Non-Life Insurance; Organisations; Reporting; Role; UK; USA; Reinsurance News Reinsurance is insurance for insurance companies. New York, December 30, 2024 – According to Guy Carpenter, a leading global risk and reinsurance specialist and a business of Marsh McLennan (NYSE: MMC), non-loss-impacted property catastrophe renewals saw notable risk-adjusted reinsurance rate reductions of 5% to 15% at January 1. Ashwin Kashyap, Co-founder and Chief Product Officer at CyberCube, said, “A more advanced and concerning development is emerging: AI agents that operate autonomously to scale cyber attacks with unprecedented speed and efficiency. Benefits of Reinsurance EXCLUSIONS: A term in an insurance policy that removes cover for specified types of loss. Facultative Certificate: Document for facultative reinsurance agreement. Challenge yourself now! findAnyQuiz. Line. For example, it might cover all residential property policies within a region, or an insurer’s entire book of business. 5. The price paid for an insurance policy. This technique is critical in a constantly changing market to preserve a Reinsurance is a financial transaction by which risk is transferred from an insurance company to a reinsurance company in exchange of a payment (reinsurance premium). Learn more. Therefore, the reinsurer is not obliged to pay if the reinsured is not liable under the original policy or if the loss is excluded by the terms of the reinsurance contract. A detailed one or half-pager is provided explaining the context and examples are provided. 17 contents. Please note that insurers can buy it from three different sources. Long-term care insurance, also called LTCI, pays out the cost of medical and non-medical services provided for senior-aged individuals who have lost the ability to care Over the past several years, I authored several reinsurance commentaries for my friends at International Risk Management Institute, Inc. A word list follows the definitions of each word. For specific guidance on Reinsurance terminology, see Practice Note: Reinsurance—essentials. Reinsurance plays a crucial role in the insurance industry, serving as And while reinsurance may limit an insurance company's exposure to a risk, the total risk exposure is not altered through the use of reinsurance. In Insurance terms, the death that occurs before the anticipated time is called premature death. The primary insurer and the reinsurer agree on terms that cover all the policies within the portfolio specified in the treaty, without needing individual consideration. In the event of any conflict between this Guide and either the Reinsurance Agreement or the Plan, the terms and conditions, including definitions, of the Reinsurance Agreement and Plan shall control. Agricultural insurance A reinsurance agreement between a reinsurer and a ceding company. Gross premium is the best measure of the Reinsurance is a form of insurance that an insurance company purchases to share the risks of its insurance policies with another insurance company. Facultative Reinsurance - Reinsurance of individual exposures. Sometimes a definition in The LOMA Their primary task is to seek favorable terms in reinsurance contracts, thereby ensuring the insurer’s risk is adequately transferred and managed. Both terms allow an individual or a company to transfer their potential loss to other companies in exchange for Self‐Funding Terminology Cheat Sheet Page 2 of 6 KEY TERM ALTERNATIVE NAMES DEFINITION Contract Type 12/12, 15/12, 12/15, 12/18, 12/27, Paid Refers to contracts typically seen in self‐funded arrangements that are offered through TPAs (third party administrators) in conjunction with a reinsurer. Learn that it is another term for retention and Reinsurance Terminology (1:39) Types of Reinsurance (4:41) Test your Knowledge Checklist Chapter 11 - Round Up (1:23) Chapter 11 - Audio Only Additional Support IF3 Course Summary (1:19) Accelerate your Revision (47:54) Accelerate your Revision - Reinsurance Terms 2 provides numerous advantages over physical copies of books and documents. Negotiating the Reinsurance Agreement. Insurance Terms Dictionary. The provision is intended to be used when the company purchases its excess of loss reinsurance on Based on its business needs, an insurer negotiates with a reinsurer to determine the terms, conditions and costs of a reinsurance contract. A Accident. These terms represent critical distinctions in the timing, coverage, and purpose of Treaty Reinsurance. Back to Top This glossary includes useful (re)insurance and Underwriting definitions. These Glossary of Reinsurance Terms. I hope this Commentary inforce are covered if reported during the renewal term. Subjects. We will discuss important issues necessary for company management to assemble an appropriate, successful reinsurance program. Back to Top •Reinsurance Intermediary – A third party designated in a reinsurance contract through whom communications between the reinsured and the reinsurer are sent. When it comes to navigating the world of life insurance, understanding the terminology is key to making informed decisions. Replacements can impose additional risks due to, for instance, the absence of liquidity in the market or increased reinsurance costs. Match. INDEMNITY: A principle whereby the insurer seeks to place you in the A short-term coverage solution used to bridge the period of time while waiting for permanent life insurance approval. The term “intermediary” stems from the Latin word “intermedius,” meaning “in between. 4 Why Reinsurance Matters, and Other Must-Know Reinsurance Concepts It is also known as a Section 125 plan of the IRS tax code, which allows you to receive certain benefits pretax such as group-term life insurance coverage, health savings accounts, and health benefits. Treaty Reinsurance: Unlike facultative reinsurance, treaty reinsurance involves an agreement covering a portfolio of policies, rather than individual ones. risk (noun): The chances that a loss will occur. For catastrophe risk insurance, this is usually the average loss a risk layer is expected to have on an annual basis, expressed in percentage of the layer’s limit. Under this arrangement, the reinsurer may accept or reject each risk offered by a ceding company. Whether you’re a first-time buyer or a seasoned policyholder, the complex language used in life insurance contracts, policies, and discussions can be overwhelming. INTRODUCTION TO PROPERTY AND CASUALTY REINSURANCE Reinsurance is a transaction in which one insurance company indemnifies, for a premium, another insurance company against all or part of the loss that it may sustain under its policy or policies of insurance. Reinsurance A reimbursement system that protects insurers from very high claims. Facultative Obligatory Treaty - A reinsurance treaty under which the The meaning of REINSURANCE is insurance by another insurer of all or a part of a risk previously assumed by an insurance company. asset adequacy analysis for reinsurance ceded by life insurers: Terminology - The terminology and details on the concept of testing for reserve . Reinsurance. Reinsurance enables insurers to optimise their profitability, manage solvency margins, and tap into specialised expertise. C. We work October 11, 2023 4 min read Insurance Finance Risk Management Reinsurance Retention Priority Insurance Terms Risk Management Understand what Priority (Reinsurance) means in the insurance industry. F-G-H. Reinsurance agreements typically use one of the two kinds of reinsurance, treaty reinsurance, and facultative reinsurance. All expenses incurred by an insurance or reinsurance company which are directly related to acquiring insurance accounts (insured, or reinsured) for the company. – Most insurers purchase reinsurance contacts to protect themselves from loss. Before you dust off that heavy Exclusion Clause: Policy terms excluding certain coverages. Reinsurance is "insurance for insurance companies," to ensure that no insurance company has too much exposure to a large event or disaster. 6 3. This is typically done when the original company is unsure about its ability to retain the risk while maintaining its financial stability. This glossary appears in both Reinsurance 1997 and Reinsurance Contract Wording 1996. Basic Terms and Definitions Reinsurance can be an unfamiliar feature of the insurance business for several people, but its origin stems from the 14 th century. This session will provide an introduction and broad overview of the world of reinsurance. In this in-depth guide, Swiss Re introduces the concepts of reinsurance and highlights the essential function reinsurance has in enabling progress and contributing to the stability of the economy and society. Several common reasons for reinsurance include: 1) expanding the insurance Reinsurance is a mechanism whereby a primary insurer (also known as a ceding company) transfers part of the risks insured under its policies to another insurance entity (reinsurer), aiming to reduce the financial liability on a single insurance company in case 3. The alphabet is hyper-linked with the International Cooperative and Mutual Insurance Federation (ICMIF) web page. While the current state-based insurance regulatory system is focused primarily on solvency regulation with a significant emphasis on regulating market conduct, contract terms, rates and consumer protection, reinsurance regulation focuses almost exclusively on ensuring the reinsurer's financial solvency so that it can meet its obligations to Reinsurance is a method by which insurance companies transfer risk to other insurers, known as reinsurers. An exclusion may apply throughout a policy (General Exclusion) or it may be limited to specific sections (e. The terms of the reinsurance contract, such as the retention amount and the limit of liability, can significantly impact an insurer's PML. Physics Automotive Physics. ) • Reinsured and Reinsurers do not share the risk, they share the loss on an XoL basis. Placement brokers present a reinsurance slip and base wording to the UW with information about the risk and collect capacity or quotations. Read more about Treaty. The following definitions are intended for general guidance. A key term for insurance professionals. RAA GLOSSARY OF REINSURANCE TERMS. Terms in this set (13) To cede. See also Subscription business/ placement, Signed lines and Written NEWLY REVISEDEach year, the Reinsurance Association of America (RAA) receives countless inquiries regarding the mechanisms and technicalities of the reinsurance business. , P. In proportional reinsurance, to pass on to another insurer (the reinsurer) all or part of the financial interests of insurance policies written by an insurer (the ceding company) with the object of reducing the company's possible liability by sharing with the reinsurer the insurance liability, premiums, and losses from the reinsured business. Glossary of Reinsurance Terms CITATION This glossary is reproduced from Reinsurance, 1997 and Reinsurance Contract Wording, 1996 by Preferred Reinsurance Intermediaries, Inc. 4 %âãÏÓ 59 0 obj > endobj xref 59 25 0000000016 00000 n 0000001081 00000 n 0000001161 00000 n 0000001340 00000 n 0000001513 00000 n 0000001676 00000 n 0000002204 00000 n 0000002575 00000 n 0000002733 00000 n 0000002767 00000 n 0000003015 00000 n 0000003238 00000 n 0000003467 00000 n 0000003543 00000 n Glossary. This month, I took the liberty of updating, revising and combining all the past Commentaries on the follow-the Reinsurance ceded is an insurance industry term that refers to the portion of risk that a primary insurer passes to another insurer. Reinsurance companies engage in retrocession agreements with other reinsurers for reasons similar to those that prompt primary ious reinsurance data, you must be careful that the reinsurance coverages producing the data are reasonably similar. For example, a $10 million catastrophe cover with a premium of $2 million is said to have a rate on line of 20 percent and a payback period of 5 years. , 14 Monckton Blvd. Learning objective: To be familiar with the relevant accounting terms/clauses in slips and treaties. Etymology. Use this glossary of insurance definitions to better understand what each term means. Cedant. Cession. > Premiums: The amount paid by the ceding company to the reinsurer for assuming the risk. Created by. ” Insurance and reinsurance are terms used to define the financial protection of a person or company against risk. ” The prefix “inter-” means “between,” and “medius” means “middle. Principles of Physics in Driving. On a long-term basis, it cannot be expected to make A firm understanding of insurance and reinsurance terminology, including familiarity with various lines of business insurance coverage and reinsurance treaty K-Star Special Servicing Asset Manager Kohlberg Kravis Roberts & Co. com. g. ) How many of the 20 key reinsurance terms can you match to their definitions. Haakon AG, a the integration of the two teams has allowed Howden to deliver more comprehensive, innovative, and long-term solutions to clients. The Benefits of Private Market Depopulation. Reinsurance: Fundamentals and New Challenges by Klaus Gerathewohl. Reinsurance treaties and facultative acceptances are contracts of indemnity for sums paid in satisfaction of liabilities under an original policy. It results from one or more insurers assuming another insurance company's risk portfolio to try to balance the insurance market. Glossary of P&C insurance terms, General insurance terms, Life insurance terms and Health insurance terms. •Beyond the “Reinsurance Terminology” slides, this is not a “Reinsurance 101” presentation •Lines of business to be covered •VM-20—Life (Term, Whole Life, and Universal Life) •VM-21—Variable Annuities •Lines of business not covered •VM-22—Fixed Annuities Take a look at our Insurance Terms Glossary to help give you a better understanding of your policy. reinsurance Reinsurance agreements may include terms like defining liability and who is liable for what, how parties will deal with lapses and claims, as well as reinstatement procedures. Property Damage) or to specific individual exclusions. Or search by letter. The Functions of Reinsurance Reinsurance does not change the basic nature of an insurance coverage. The ceding company and the reinsurer negotiate the terms of the reinsurance contract. 2 – Reinsurance Agreement: The ceding company and the reinsurer agree on the terms of the reinsurance contract. This includes choosing the right type of reinsurance and negotiating The process the insurance carrier goes through to determine the degree of risk, terms of coverage and premium to charge to write your insurance policy. Here, we examine allocating long-tail losses to the correct insurance policies and billing the correct reinsurers for their It happens to the best of us, especially when we're talking about complicated insurance terms and concepts. 638. Gone are the days of carrying around heavy textbooks or bulky folders filled with papers. Test. Recently Added Terms. A comprehensive exploration of treaty agreements within the domain of reinsurance, elaborating on the interaction between ceding companies and reinsurers. This includes: > Coverage Terms: Defining the risks or portfolios covered by the agreement. 3690 | 1445 New York Ave, 7th Floor, Washington, DC 20005. Also known as a temporary insurance agreement (TIA). (Hence the terminology ‘Excess of Loss’ / XoL. The term is generic in Facultative Reinsurance - reinsurance for a specific policy for which terms can be negotiated by the original insurer and reinsurer. As one delves into the more technical aspects of a reinsurance contract, the term “bordereau” of- Loss Occurring and Risk Attaching Reinsurance are two distinct and fundamental concepts in the insurance and reinsurance industry. , is the leading trade association of property and casualty reinsurers doing business in the United States. Skip to Main Navigation Trending Data Non-communicable diseases cause 70% of global deaths Renewals required: In cases where reinsurance covers are short-term (e. Under a reinsurance contract, an insurer is indemnified for losses occurring on its insurance Placement - This term refers to the sale of risk to the insurance and reinsurance market. The provision of reinsurance accounts, premiums, losses, commissions, reserves, portfolios. Risk Attaching Reinsurance: The term “risk attaching” refers to a treaty in which the Reinsurer only pays the Ceding party for losses arising from policies issued (new or renewed) or in force during the reinsurance contract period, regardless of when the losses occurred. ” Reinsurance refers to a transaction in which one party, the "reinsurer," in consideration of a premium paid to it, agrees to indemnify another party, the "reinsured," for part or all of the liability assumed by the reinsured under a policy of insurance that it has issued. Related Terms. They do not override or qualify any definition that appears in any Lloyd’s byelaw or regulation, in any contract or in any other document. Reinsurance transactions in the insurance industry can become complicated. PEARCE W e are grateful to the Reinsurance Association of America for permission to reprint the « Glossary of Reinsurance Terms :i> which the RAA has produced. Reinsurance contracts: Reinsurance contracts are an essential aspect of reinsurance, and they play a critical role in determining an insurer's exposure to risk. hsoqq acpwnvo cwne sljc scz fotsy noorfu kchjzjo imvrqr effl