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
Financial guarantee policy that insures against loss of principal invested in a mutual fund. ...
Coverage for exposures that exhibit a possibility of financial loss. ...
Coverage for a loss incurred by the insured resulting from an infringement of the insured's patent or coverage for a claim made against the insured resulting from infringement by the ...
Investment strategy that advocates the transfer of amounts from one category of investment to another category according to a perception of how each of these categories of investments will ...
Appreciation in the unsold assets' value. When assets are sold, their capital gain (loss) is shown on the insurance company's income statement; any unrealized gain or loss is not included ...
Record of debit or industrial insurance policies. ...
Income paid under a disability policy that is not covered under workers compensation benefits. It is usually expressed as a percentage of the insured's income prior to the disability, but ...
1957 federal law setting a limit on the liability of operators of nuclear facilities. The law, an amendment to the Atomic Energy Act of 1954, authorized establishment of private insurance ...
Federal statute relating to drug abuse policies that requires all employers with federal contracts at least equal to $25,000 to certify, as a condition of receiving a federal contract, that ...
Have a question or comment?
We're here to help.