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
Formerly an employer's defense under which an injured employee had to bring a cause for action against the fellow employee causing the injury, not the employer. Workers Compensation laws ...
Coverage under a commercial workers compensation policy for situations in which an employee not covered under workers compensation laws could sue for injuries suffered under common law ...
Amount of the increase in the book of business of an insurance company over a specified time interval. ...
Model state law of the NAIC that requires the insurance agent who is replacing the policy to: give the policyholder a replacement notice; forward a signed copy of the replacement notice to ...
Sum of money paid on the principal amount of money invested or loaned. ...
Document used in the transportation of goods that must be presented when a claim is made for a loss incurred. This document establishes the fact that the goods were under the care, custody, ...
Those claims that arise when two or more property and casualty insurance companies have coverage on a loss. Which company then owes which portion of the claim must be determined. ...
Maximum limit of liability of an insurance company for a particular claim or kind of loss that is applicable in general to all such claims or losses. This maximum limit of liability is ...
System whereby the re insurer shares losses in the same proportion as it shares premium and policy amounts. Proportional reinsurance may be divided into the two basic forms: automatic ...
Have a question or comment?
We're here to help.