Fire Catastrophe Reinsurance
Means used by a direct fire underwriter to protect against accumulation for a fire account, as well as against extremely large fire account liability. For example, heavy liabilities under individual risks can be analyzed by the initial fire underwriter to determine the number of separate fire risks involved. The reinsurance method applied to the risks is a quota share or surplus share treaty with the use of a facultative reinsurance cover if necessary. Under this method, the re-insurer assumes the liability of a proportionate share of the risks in exchange for a proportionate share of the premiums. An extremely large number of losses under individual risks caused by a single event, commonly referred to as a conflagration hazard, arises when different risks may be affected by one fire. An example would be widespread damage to many adjacent private houses. While the loss for each retained individual risk would be small, the aggregate would be so large that it would affect the stability of the fire insurance company. Catastrophe reinsurance would protect any surplus reinsurance and excess of loss reinsurance up to a stated amount.
Popular Insurance Terms
Funds paid by an insurance company associated with the normal costs of doing business other than the costs of claims payments. ...
When we are young, we usually don’t take our retirement seriously and don’t even know the definition of an Individual Retirement Account (IRA). We become more preoccupied with ...
Insurance company incorporated according to the laws of the state in which a risk is located and the policy issued. The insurance company is domiciled in that state. ...
Total of the number of accumulation units times the accumulation unit value for a variable annuity. Similar procedure is followed in the calculation of the current market value of a mutual ...
Income (premiums + investment earnings) minus disbursements (dividends + death claims + policies surrendered for benefits + general expenses). ...
Decrease in value of property as the result of technological advancement and/or changing social mores. This factor is used to measure the amount of depreciation in determining the actual ...
Trust under which grantor retains income from the assets that have been transferred to the trust. This trust permits the avoidance of probate, protects the assets from creditors, and leads ...
Coverage if state or municipal law requires that a damaged or destroyed building must be rebuilt at an increased cost to comply with building code provisions that were not in effect when ...
Legislation excluding commercial banks that are members of the Federal Reserve System from most types of investment banking activities. The coauthor of the Act, Senator Carter Glass of ...
Have a question or comment?
We're here to help.