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Reinsurance Glossary

Home | A B C D E F G H I J K L M N O P Q R S T U V W X Y Z | Index

 

Incurred But Not Reported (IBNR)
The actuarial estimate of amounts required to pay ultimate net losses after netting out existing amounts on reported but unpaid claims.  The IBNR estimate includes an allowance for potential changes in such existing amounts as well as additional amounts for claims that have already occurred but are yet to be reported.

Indemnity Reinsurance
A form of reinsurance under which the risk is passed to the reinsurer who reimburses the ceding company for covered losses.  The ceding company retains its liability to, and its contractual relationship with, the insured.

Indexing, Indexation
The adjustment of a ceding company's retention and the reinsurance limit by a measure of inflation such as the Consumer Price Index.  Under indexation, the ceding company's original retention and the reinsurance limit are multiplied by the result of dividing the index on the settlement date by the index as of the effective date of the reinsurance agreement.

Individual Cession Administration
A system of reinsurance administration whereby the ceding company sends a separate notification to the reinsurer for each risk to be reinsured.  The reinsurer then establishes individual records for each cession and calculates the reinsurance premium, inforce, and reserve information for its financial reports.  Typically, the reinsurer bills the ceding company for the premium due.

Insolvency Clause
A provision in reinsurance agreements that provides for the continuance of payments of the obligations of the reinsurer as though no ceding company insolvency had occurred, with appropriate recognition of additional expenses of the reinsurer caused by the insolvency.  This provision is required in most states.

Intermediary
A third party in the design, negotiation, and administration of a reinsurance agreement.  Intermediaries recommend to ceding companies the type and amount of reinsurance to be purchased and negotiate the placement of coverage with reinsurers.  Also called a broker.  See Brokerage Market.

Intermediary Clause
A provision in reinsurance agreements which identifies the intermediary negotiating the agreement.  Most intermediary clauses shift all credit risk to reinsurers by providing that (1) the ceding company's payments to the intermediary are deemed payments to the reinsurer, (2) the reinsurer's payments to the intermediary are not payments to the ceding company until actually received by the ceding company.  This clause is mandatory in some states.

  

  


  Glossary of Reinsurance Terms compiled by
the American Council of Life Insurers (ACLI) Reinsurance Committee
and presented by Central Security Life Insurance Company (CSLIC).

 

This text, or any part thereof, may not be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, storage in an information retrieval system, or otherwise, without the prior written permission of the publisher.

While a great deal of care has been taken to provide accurate, current, and authoritative information in regard to the subject matter covered in this reinsurance glossary, the ideas suggestions, general principles, conclusions, and any other information presented here are for educational purposes only. This reinsurance glossary is provided  with the understanding that it is neither designed nor intended to provide the reader with legal, accounting, investment, marketing, or other types of professional business management advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

 

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