Definitions

A temporary record of reinsurance arrangements for which coverage has been effected, pending replacement by a formal reinsurance contract. Also known as a Slip. See Binder

The ratio of paid facultative cessions to number of facultative submissions. The placement ratio can be used to determine the effectiveness of the reinsurer’s facultative underwriting and the cost per cession.

Property/Casualty Insurance products that are designed for and bought by individuals, including homeowners and automobile policies. See Commercial lines

Assault, battery, false arrest, detention, imprisonment, wrongful entry, eviction or other invasion of private occupancy or abusive litigation (criminal or civil), abuse of process, libel, slander, defamation and violations of the right of privacy.

An amount paid to the Ceding Company by the reinsurer if the reinsurance ceded in a given period meets certain persistency standards. Persistency bonuses are used to encourage the writing of persistent business. An enhancement to the policy’s benefits, usually in the form of additional interest credits and/or reduced charges, for policies that remain in force for … Read more

Retention and amount of reinsurance apply “per risk” rather than on a per accident or event or aggregate basis.

A method of rating under which the underwriter sets the price based upon his view of how frequently the loss event might occur over a period of time. Thus, if the underwriter felt that the loss would occur only once in five Years, the price would be set (without regard to expenses and profit margins) … Read more

Includes Quota Share, First Surplus, Second Surplus, and all other sharing forms of reinsurance whereunder the reinsurer participates pro rata in all losses and in all premiums.

A limit placed on the absolute amount of coverage that may be inforce and applied for on an individual life for reinsurance purposes. If the insurance exceeds the limit, the reinsurer will decline to assume any of the risk. This is most commonly applied to supplementary benefits such as accidental death coverage.

A combination of coinsurance and modified coinsurance. In most situations a portion of the initial reserves equal to the initial allowance are held on a mod-co basis, while the remaining reserves are held on a coinsurance basis, eliminating any initial cash transfer. Also known as Co/Mod-co.