In property insurance, requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss.
For health insurance, it is a percentage of each claim above the deductible paid by the policyholder. For a 20 percent health insurance coinsurance Clause, the policyholder pays for the deductible plus 20 percent of his covered losses. After paying 80 percent of losses up to a specified ceiling, the insurer starts paying 100 percent of losses.
A method of reinsurance under which the assuming company receives a proportionate share of all of the risks and cash flows of the policy. (One typical exception may be the policy fee, which remains with the Ceding Company.)
The reinsurer receives its share of the premiums and benefits, and sets up its share of the reserves. Typically, the reinsurer pays an allowance to the Ceding Company to represent the reinsurer’s share of the acquisition and maintenance expenses.