Nonproportional Automatic Reinsurance
Definition of "Nonproportional automatic reinsurance"
Obligatory reinsurance contract in which a reinsurer agrees to pay for all or a large portion of losses up to a limit, when these losses exceed the retention level of the cedent. The reinsurance premium paid by the cedent is calculated independently of the premium charged to the insured. It is not expected that every treaty will pay for itself or that every loss will be recouped by the reinsurer. When a cedent reinsures on a nonproportional basis, it retains substantially more of its profits than reinsuring on a proportional basis. Nonproportional differs from proportional reinsurance in that it does not involve the sharing of risks.
Popular Insurance Terms
Property damage, accident, or injury resulting from vagaries of nature, including tornadoes, hurricanes, and floods. ...
Describing a risk whose probability of loss is less than the norm or the standard expectation of loss for that underwriting classification. ...
Attachment to a property insurance policy that automatically adjusts its coverage according to the construction cost index in a community. This endorsement is necessary in a property ...
Insurance company's total premium income plus investment income. ...
Coverage for dispensers of alcoholic beverages against suits arising out of bodily injury and/or property damage caused by its customers to a third party. Establishments covered include ...
Geographical area in which commerce can be conducted without tariffs being applied. The concept was adopted in insurance through the use of a reinsurance facility for buying and selling of ...
Agreement among insurance companies through which a multinational employer is permitted to purchase employee benefits coverage's for two or more of its overseas subsidiaries under a single ...
Amount of uncertainty in a given situation. Probability that actual experience will be different from what is expected. ...
Plan that combines the simplicity and flexibility of the traditional profit-sharing plan with the best features of the defined benefit plan and the target benefit plan. By age-weighing the ...
Have a question or comment?
We're here to help.