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
Pension plan funding instrument in which contributions paid by an employer are deposited to accumulate at interest. (These plans are usually noncontributory.) Upon retirement, an immediate ...
Individual who is legally responsible for taking care of another individual (s) who is deemed to be incapable of managing his/her own affairs. For example, children under the age of ...
Coverage on cargo in overseas ships for war-caused liability excluded under standard ocean marine insurance. Not covered is cargo awaiting shipment on a wharf, or on ships after 15 days of ...
Commission that is paid based on how profitable a particular type of business proves to be that is written by an agent. ...
Statement regarding an insured's retention of low-severity risks because they are not catastrophic, and can be absorbed without having a dramatic effect on the financial structure of a ...
Method of determining reimbursement from medical insurance according to diagnosis on a prospective basis. It originated with the medicare program. ...
Commission paid to an agent after the first year commission has been paid to that agent. Renewal commissions generally form a substantial portion of an agent's income after four years in ...
Temporary insurance contract providing coverage until a permanent policy is issued. In property and casualty insurance, some agents have authority to bind the insurance company to cover ...
Theft of another's property by a person entrusted with that property. Coverage can be found under various bonding arrangements. ...
Have a question or comment?
We're here to help.