Stop Loss Reinsurance
Protects a cedent against an aggregate amount of claims over a period, in excess of a specified percentage of the earned premium income. Stop loss reinsurance does not cover individual claims. The reinsurer's liability is limited to a stipulated percentage of the loss and/or a maximum dollar amount. The stop loss method protects the cedent against the possibility that the aggregate value of an accumulation of small losses will exceed a specified percentage of earned premium income of a particular class. Stop loss reinsurance is the exact opposite of the quota share reinsurance and surplus reinsurance, and differs considerably from other forms of EXCESS OF LOSS reinsurance. For example, a reinsurer can provide a cedent with 50% of the amount by which aggregate incurred losses of the cedent in any year exceed 70% of the cedent's earned premium income during that year.
Popular Insurance Terms
Endorsement to a property insurance policy providing all risks coverage for insured property. Excluded properties include residences, farms, and manufacturing properties. This endorsement ...
Assistance program for the financially needy. Medicaid, also referred to as Title XIX of the Social Security Act, was enacted in 1965 at the same time as medicare. It is a joint ...
Fee charged to a policyowner when a life insurance policy or annuity is surrendered for its cash value. This fee reflects insurance company expenses incurred by placing the policy on its ...
In insurance, company revenues from underwriting and investment. Insurance companies make money first, by underwriting good risks so that their premium dollars cover claims losses and ...
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. ...
Group appointed by President Nixon in 1971 to study workers compensation laws under the authorization of the occupational safety and health act (OSHA). It issued sweeping recommendations to ...
Legal status giving an insurance company all rights to an insured's property. The abandonment clause is usually found in marine insurance and not in other property insurance policies such ...
Physical, moral, or financial circumstance of a life insurance applicant that sets him or her apart from a physically, morally, and financially sound standard applicant. The underwriting ...
Legal procedure through which a court determines the rightful claimant (of two or more claimants making the same claim) against a third party. Insurance companies use interpleader if claims ...
Have a question or comment?
We're here to help.