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
Insurance contract that cannot be cancelled by the insurance company. Since the insurance policy is a UNILATERAL CONTRACT instead of a BILATERAL CONTRACT, the INSURED may cancel at will. ...
Transaction of reinsurance under which there is a limit on the total liability of the re-insurer and future investment income is a recognized component of the underwriting process. This ...
Life insurance payment that is constant from year to year. The premium may be paid throughout the life of an insured or may be limited to a maximum number, such as 30 annual premiums. The ...
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System of classifying face amount of policies according to size within a given range. The premium rate per $1,000 of face amount varies on a declining basis. As the face amount increases, ...
Coverage in which the face amount of a policy remains uniform, neither increasing nor decreasing for as long as the policy is in force. ...
Regulation named after a former Superintendent of Insurance of New York State, and instituted in the early 1900s. It requires every insurer admitted to New York to comply with the New York ...
Same as term Automobile Assigned Risk Insurance Plan: coverage in which individuals who cannot obtain conventional automobile liability insurance, usually because of adverse driving ...
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