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
Insurance company's growth rate of adjusted surplus divided by its adjusted liabilities. The greater this ratio, the more financially sound the insurance company, as the surplus would be ...
Latin phrase meaning "without which not," signifying a legal rule in tort and negligence cases. Under this rule, a plaintiff trying to prove that an injury was a direct result of a ...
Agreement prepared by an insurance company and offered to prospective insureds on a take-it-or-leave-it basis. If the contracts are misinterpreted by insureds, courts have ruled in their ...
Coverage on an all risks basis for goods in transit, bailment, and while on the premises of others. ...
Means of distribution that uses general agents rather than branch offices to sell life and health insurance. ...
Highly visible form of marketing communication with the public with these objectives: (1) encourage agents and brokers to sell insurance company products, (2) predispose customers to be ...
Property and/or liability coverage for a municipality. Municipalities are responsible for maintenance of through ways as well as a myriad of public services. Liability insurance for ...
Business interruption insurance in which the insured is indemnified for loss of earnings and payment of expenses resulting from adverse weather conditions. For example, the raining out of a ...
The regulation that, prior to its repeal, limited the amount of interest a time deposit at a bank could pay. ...
Have a question or comment?
We're here to help.