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
Independent, nonprofit, membership hospital plan. Benefits provided include coverage for hospitalization expenses subject to certain restrictions: for example, semiprivate room only. A ...
Illness or sickness such as cancer, poliomyelitis, leukemia, diphtheria, smallpox, scarlet fever, tetanus, spinal meningitis, encephalitis, tularemia, hydrophobia, and sickle cell anemia, ...
Inland marine policy to cover liability for goods that belong to clients while in a mover's possession. ...
Cost of doing business, not including pure expectation of loss. ...
Coverage for ships in port for a lengthy stay and/or those that are under repair. Insures on an all risks basis to include the exposures associated with the ship moving from one dock to ...
Right to sell a given security at a stipulated price until a future expiration date. For example, assume the "None-Do-Well" company's stock has a market value of $20. Investor A sells ...
In property insurance, contract section providing for reimbursement for removal of debris resulting from an insured peril. The amount of reimbursement under the homeowners insurance policy ...
Same as term Cargo Insurance: shipper's policies covering one cargo exposure or all cargo exposures by sea on all risks basis. Exclusions include war, nuclear disaster, wear and tear, ...
Financial holdings that can be converted into cash in a timely manner without the loss of principal, such as U.S. Treasury Bills. Liquidity of assets is one of the most important principles ...
Have a question or comment?
We're here to help.