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
Life insurance policy in which the cash value and in some circumstances the death benefit will vary according to the investment performance of an underlying portfolio usually comprised of ...
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Term used for a general class of insurance such as life insurance, property insurance, or workers compensation insurance. ...
1968 federal legislation that makes it mandatory for lenders to disclose to credit applicants the annual interest percentage rate (APR) and any finance charge. ...
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Paid loss experience for the period of time from January 1 to December 31 of a specified year (not necessarily the current year). ...
Employee benefit plans under which both the employee and the employer pay part of the premium. Contribution ratios vary. For example, an employer contributes two dollars for every dollar ...
Tax advantages of investing in life insurance fall into two main areas: tax deferral on untaxed buildup of earnings in such cash value policies as whole life insurance and annuities, and ...
Conveying of assets from the donor to the beneficiary as a means of minimizing the legal tax obligation of the estate of the donor and avoiding probate. ...
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