Definition of "Reinsurance"

Jim Dunne real estate agent

Written by

Jim Dunneelite badge icon

La Rosa Realty, LLC

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.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Feature of pension plans whereby an employee whose service has been interrupted can have that period credited toward retirement. ...

Individual retirement account established under the tax reform act of 1986, for a spouse who has unearned income. The maximum annual combined contribution into the worker's and spouse's IRA ...

Portion of the death benefit in a life insurance policy paid upon the insured being diagnosed as having a terminal illness that will result in death within a year. ...

Prospective insured who completes and signs a written form containing personal statements about himself/herself. ...

Coverage usually provided under the commercial general liability insurance (CGL); it can also be purchased separately. ...

Use of the threat of violence or actual violence in taking property from someone else's possession. This peril is covered on a personal basis through the purchase of a homeowners insurance ...

interconnection of computers that contain pages classified into groups called web sites that can be accessed over the internet. The only requirement for visiting a web site is to have ...

Process of the continual reinsurance of a ceding company's portfolio of insurance policies. All premiums that have been ceded become earned premiums. ...

Coverage in the event that, while practicing the profession of druggist, an act or omission is committed resulting in bodily injury, personal injury, and/or property damage to a customer. ...

Popular Insurance Questions