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
Act in which volunteers of nonprofit organizations and government entities do not incur liability if they are acting within the scope of their volunteer activities, their actions do not ...
Modest amounts of coverage sold on a debit basis. The face amount is usually less than $1000. ...
Professional designation conferred by the International Foundation of Employee Benefit Plans and the Wharton School of the University of Pennsylvania. In addition to professional business ...
Type Of GUARANTEED INVESTMENTS CONTRACT in which funds for the contract are put in the insurance company's general account ...
Partnership in which family members hold all interest in the partnership. This partnership is treated as a cash flow through stand-alone entity. All sums of income and credits, as well as ...
Coverage in which one premium payment is made and the policy is fully paid up with no further premiums required. ...
Risk that premiums and reinsurance, as well as other receivable instruments, will not be collected. ...
Procedure to minimize the adverse effect of a possible financial loss by (1) identifying potential sources of loss; (2) measuring the financial consequences of a loss occurring; and (3) ...
Same as term Captive Insurance Companies Association (CICA): trade association located in New York City, consisting of approximately 200 captive insurance companies. The objective of the ...
Have a question or comment?
We're here to help.