Reinsurance
Definition of "Reinsurance"
Form of insurance that insurance companies buy for their own protection, "a sharing of insurance." An insurer (the reinsured) reduces its possible maximum loss on either an individual risk (facultative reinsurance) or a large number of risks (automatic REINSURANCE) by giving (ceding) a portion of its liability to another insurance company (the reinsurer).
Reinsurance enables an insurance company to expand its capacity; stabilize its underwriting results; finance its expanding volume; secure catastrophe protection against shock losses; withdraw from a class or line of business, or a geographical area, within a relatively short time period; and share large risks with other companies.
Popular Insurance Terms
An act or violation that consists of two wrongs: tort negligent act or omission by one or more parties against the person or property or another party or parties, liability insurance is ...
Life is unpredictable so to compensate this, people have invented insurance. Insurance deals with unforeseen events. Sometimes insurance companies cover only a part of your losses and a few ...
Acquisition and employment of assets in order to maximize the return on these assets through: establishment of financial planning objectives; development of financial plans by which these ...
Policy that has an initial premium with flexible premiums thereafter. Within limits, a policy owner can select both the future amount and frequency of premiums, or can stop and start ...
The definition of special acceptance explains how two insurance institutions work together for the benefit of the masses. In order to define what special acceptance means, we must ...
Type of guaranteed insurance contract in which the term is fixed, the rate is fixed, and the contract owner does not participate in the insurance company's earnings. ...
Historical mortality table that replaced the annuity table, 1949, used for the calculation of annuity rates with more-current mortality experience at that time. This table was subsequently ...
Value in life insurance policies that entitle the insured to these choices: to relinquish the policy for its CASH SURRENDER VALUE. (Note that in the beginning years the cash value may be ...
Coverage tailored to the particular requirements of an insured, when a standard policy cannot be used to provide coverage for real or personal property. A manuscript policy is often written ...
Have a question or comment?
We're here to help.