Fidelity And Surety Catastrophe Insurance
Definition of "Fidelity and surety catastrophe insurance"
Mechanism used by a fidelity and surety insurance company to spread its liability through reinsurance by issuing a surplus treaty as a first layer of coverage, thereby enabling a cedent to limit its liability on the business written, while at the same time utilizing the flexibility that the surplus method offers. The reinsurance catastrophe cover provides a second layer of coverage. Reinsurance covers are used by the insurance company to:
- avoid accumulation of liability on individual principles. Warehouse bonds are an example of such accumulations, because they are required in great number and they result in large aggregate amounts.
- achieve a balance among the various types of bonds that the insurer assumes.
- reduce violent fluctuations in experiencing high loss ratios on many classes of bonds.
Popular Insurance Terms
Money expended with the object of profit. The goal of an insurance company is to invest in assets with a rate of return greater than that to be paid out as benefits under its policies. ...
Retirement plan under which contributions are fixed in advance by formula, and benefits vary. These plans are often used by organizations that must know what the cost of employee benefits ...
Acceptance of an application for an insurance policy by the insurance company, indicated by the signature of an officer of the company on the policy. The officer, who must have signature ...
Real property (structure (s) attached to the land) that is occupied and/or is under the care, custody, or control of an individual, individuals, or an organization for which an insurance ...
Flat amount added to the basic premium rate to reflect the cost of issuing a policy, establishing the required records, sending premium notices, and other related expenses. ...
Reductions in the value of property due to physical damage or destruction. ...
Value of an insurance company or other company that consists of capital and surplus and an estimated value for business on the company's books. ...
Addition to a workers compensation insurance policy to cover payments to injured employees who are not covered by a state's workers compensation law. This endorsement provides employees who ...
Right to insurable interest in property such as the right of a secured creditor in the property pledged as security. ...
Have a question or comment?
We're here to help.