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
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Based on historical loss experience, from which future loss experience is predicted. ...
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Circumstance in which there is a probability loss to personal property or real property resulting from property damage, destruction, or disappearance. ...
Proportion of losses incurred to premiums earned. This ratio indicates the amount of a premium dollar that is being consumed by losses. ...
Arbitrator who settles disputes over the amount of loss when an insurer and an insured do not agree. ...
Estate under the legal and administrative guidance of both the surety and the fiduciary. Any actions on the part of the estate requires the signatures of both in order to reduce the chances ...
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