Automatic Proportional Reinsurance
Form of coverage in which an insurer automatically reinsures individual risks with its reinsurer. The insurer must transfer (cede) the risks to its reinsurer and its reinsurer must accept this transfer (cession). Losses and premiums are shared; the reinsurer shares them in the same proportion as it does that total policy limits of the risks. The insurer receives from the reinsurer a transfer commission reflecting the so-called equity in the unearned premium reserve of the insurer. This provides for acquisition expenses, premium taxes, and the insurer's cost of servicing the business. Automatic proportional reinsurance may be subdivided into two primary types: quota share and surplus.
Popular Insurance Terms
Right of an insured to make additional purchases of life insurance without having to take a physical examination or show other evidence of insurability. Additions can be bought at stated ...
Employee benefit plan that allows the employee to choose among several different benefits offered by the employer. In essence, the employee is provided with the opportunity to make a ...
Health plans established by associations of hospitals and physicians to provide hospital service and care, and medical and surgical care. ...
Costs incurred by an insurance company other than agent commissions and taxes; that is, mainly the administrative expense of running a company. ...
Coverage on an all risks basis through an endorsement to a business property insurance policy in which each sign is specifically scheduled, subject to the exclusions of wear and tear, and ...
Written notice, to be submitted by the claimant, required by the insurance company in the event of an insured peril. This notice is part of the standard property and casualty insurance ...
Language adopted by the national association of insurance commissioners (naic) and recommended or required by state law. While they rarely dictate the language of policies, states often ...
Table used by the Internal Revenue Service (IRS) in evaluating split dollar life insurance plans as to the extent of the economic benefit that is considered taxable ordinary income to the ...
professional designation earned after the successful completion of three national examinations given by the insurance institute of America (IIA). Covers such areas of expertise as ...
Have a question or comment?
We're here to help.