Fidelity And Surety Catastrophe Insurance
Definition of "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
Fidelity bond provided under a blanket position bond (in which each position is covered on an individual basis) or a commercial blanket bond (in which a loss is covered on a blanket basis ...
Insurance company representative who sells debit life insurance (industrial life insurance). This agent is usually more of a collector of small premium payments on a weekly, biweekly, or ...
Insured's age at the date a term life insurance policy is issued. An original age or retroactive conversion option permits the insured to convert the term policy to a cash value policy as ...
Policy not designed to pay the policyowner a dividend. ...
Amount that a policyowner can borrow from a cash value of a permanent life insurance policy. ...
Gain when the underlying asset that moves in one direction is significantly different from the loss when the underlying asset moves in the opposite direction; for example, when gains and ...
Duration of a policy. Property and casualty coverages are usually written for one year, although a personal automobile policy can be for six months. Life insurance can be written on a term ...
Plan administered through a primary private life insurer and reinsured through other private life insurers, providing a death benefit equal to: one year's salary for active employees at ...
Deductible, applied to every loss, expressed as a percentage of that loss. As the loss increases, the deductible amount increases. ...
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