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
In life insurance, single payment instead of a series of installments. ...
Annual report to policyholders of certain cash value life insurance products and annuities to inform them of the value of the investment portion of their contracts. Buyers of whole life ...
Assets that are not readily convertible into cash 'without a significant loss of principle, such as an automobile, a house, television set, a radio, etc. ...
Total limit of coverage under all policies applicable to the covered loss for which an insured can be indemnified. For example, if two health insurance policies are in force on the same ...
Effort of a poor risk to seek insurance coverage. The onset of a health problem such as heart disease, for example, may prompt a person to apply for life insurance before seeking medical ...
Same as term Annual Policy: contract remaining in force for up to 12 months unless canceled earlier. After 12 months the policy can either be renewed or not renewed by the insurance company ...
Coverage under the Commercial Property Floater for loss under two forms: livestock mortality life insurance and livestock floater. This is really life insurance coverage for livestock. ...
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 ...
Risk associated with excessive rate of growth in premiums and contingencies such as affiliate company requirements. ...
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