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
Projected percentage of the earned premiums that will be required by the insurance company to pay for the incurred losses plus the loss adjustment expense. ...
Law created by government regulatory agencies, such as the office of the commissioner of insurance, through decisions, orders, regulations, and rules. For example, rate making hearings ...
Compulsory employee benefit plan under which participants are entitled to a series of benefits as a matter of right. The plan is administered by a federal or state government agency and has ...
Stipulations of the rights and obligations of an insured and an insurer under a policy. ...
Clause in a property insurance policy that requires the insurance coverage in that policy to be allocated in the proportion that it bears to the total insurance coverage in force from all ...
Insurance company's total premium income plus investment income. ...
Analytical procedure to predict the failure rate of a system still in the design stage. ...
Assistance provided to a person in performing the basic daily necessities of life, such as dressing, eating, using a toilet, walking, bathing, and getting in and out of bed. This type of ...
Individual action or failure to act as a reasonably prudent person would under similar circumstances, resulting in harm to another. Also called negligence. A reasonably prudent person is ...
Have a question or comment?
We're here to help.