Surplus Reinsurance
Automatic reinsurance that requires an insurer to transfer (cede) and the reinsurer to accept the part of every risk that exceeds the insurer's predetermined retention limit. The reinsurer shares in premiums and losses in the same proportion as it shares in the total policy limits of the risk. The surplus method permits the insurer to keep for its own account small policies, and to transfer the amount of risk on large policies above its retention limit. For example, assume an insurer issues a policy for $20,000. The insurer keeps $5000 ('A) and transfers the remaining $15,000 (%) to its reinsurer. This is called a three line surplus because the amount transferred equals three times the retained line of the insurer. The insurer keeps % and transfers % of the premium to the reinsurer. In the event of total loss, the settlements between the insurer and the reinsurer would be effected on the identical 'A-'A basis. The same principal applies if there is a partial loss, in that the reinsurer must reimburse the insurer in the same proportion as the reinsurance premium received.
Popular Insurance Terms
Service under the auspices of the medical information bureau (MIB) that provides the insurance company with nonmedical information concerning the APPLICANT for DISABILITY INCOME INSURANCE. ...
Type of commercial property policy that provides coverage for a business' indirect losses resulting from damages to the property of the business. Coverage normally contains a coinsurance ...
Same as term Application: written statements on a form by a prospective insured about himself, including assets and other personal information. These statements and additional information, ...
Liability coverage for dockworkers for damage to property in transit while in their care. ...
Unsecured bond. The only protection for the lender is the credit and reputation of the borrower. The method of evaluating the quality of debentures is to analyze the earning power, overall ...
Coverage for suits brought by a plaintiff as the result of bodily injury incurred while using an elevator on the insured's premises. ...
Insurance salesperson who contacts potential customers and handles clerical responsibilities but has no authority to make insurance contracts. ...
Acceptance of an application for an insurance policy by the insurance company, indicated by the signature of an officer of the company on the policy. The officer, who must have signature ...
Relationship between occupation of an insured and degree of risk in such coverages as life, health, and workers compensation. Some occupations are more risky than others; for example, a ...
Have a question or comment?
We're here to help.