Reinsurance
Definition of "Reinsurance"
Form of insurance that insurance companies buy for their own protection, "a sharing of insurance." An insurer (the reinsured) reduces its possible maximum loss on either an individual risk (facultative reinsurance) or a large number of risks (automatic REINSURANCE) by giving (ceding) a portion of its liability to another insurance company (the reinsurer).
Reinsurance enables an insurance company to expand its capacity; stabilize its underwriting results; finance its expanding volume; secure catastrophe protection against shock losses; withdraw from a class or line of business, or a geographical area, within a relatively short time period; and share large risks with other companies.
Popular Insurance Terms
Liquor liability legislation in 20 states under which a dispenser of alcoholic beverages is held responsible for bodily injury and/or property damage caused by its customers to a third ...
Accrediting body for the CPCU (Chartered Property and Casualty Underwriter) designation. The institute provides undergraduate and continuing education in property and casualty insurance ...
Record of losses and premiums received for accident coverage within a 12-month period. These statistics show the percentage of each premium received that is being paid out in claims and ...
Situation involving a chance of a loss or no loss, but no chance of gain. For example, either one's home burns or it does not; this risk is insurable. ...
Insured's income prior to the disability minus the insured's income after the disability. ...
Period, set by law, after which a damage claim cannot be made. Limits are set by individual states and usually range from one to seven years. ...
Health insurance that is not subject to alteration, termination, or increase in premium upon renewal. ...
Covers property damage and theft coverage in two areas not subject to a coinsurance requirement or a deductible. Coverage A. If the bank becomes liable for loss to a customer's property ...
In property and casualty insurance, contract section containing such information as name, description, and location of insured property; name and address of the insured; period a policy is ...
Have a question or comment?
We're here to help.