Funded Cover
Definition of "Funded cover"
Transaction in which the ceding company pays a premium and is guaranteed certain future payments to fund future losses. If losses are less than was expected, the ceding company receives a profit commission. Conversely, if catastrophic losses are occurring at a faster rate than the investment return earned on the premium, the ceding company will not receive its full recovery on its reinsurance.
Popular Insurance Terms
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Method whereby an insurer pays the amount of each claim for each risk up to a limit determined in advance and the reinsurer pays the amount of the claim above that limit up to a specific ...
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