or Recapture Provision
- In a reinsurance treaty, a provision that allows a ceding company
to take back some or all of the reinsured business from a reinsurer.
- A reinsurance arrangement by which two companies exchange risk
and, in effect, reinsure each other.
- Reevaluation of the pricing classification of an inforce policy on
an insured life, based on current evidence of insurability.
The insurer may improve the classification or leave it
unchanged. The ceding company should consider the effects of
reconsideration on the reinsurer.
- Refund Reinsurance
- A form of reinsurance under which the premium rates are subject to
an experience refund as opposed to being fixed. See Experience
- An additional premium paid to replenish (reinstate) the limit
consumed in the event of a loss.
- The transfer of some or all of an insurance risk to another
insurer. The company transferring the risk is called the
"ceding company"; the company receiving the risk is called
the "assuming company" or "reinsurer."
- Reinsurance Broker
- See Reinsurance Intermediary.
- (1) Pool that contains various reinsurance companies with each
sharing reinsurance contracts on a pro rata basis as they are
submitted to the pool; (2) Market that operates much like the New
York Stock Exchange in that reinsurance contracts are bought and
sold on a bid and asked basis. See also Layering,
Pool, and Reinsurance
- An independent contractor who matches the needs of ceding
companies with the products of reinsurers. Also known as a
- Reinsurance Pool
- See Pool.
- Reinsurance Treaty
- See Treaty.
- Reinsurance Wheel
- A procedure for retroceding individual life insurance risks in
excess of a reinsurer's own retention to a group of
retrocessionaires (up to their subscribed limits) in rotation, the
order being determined by their positions as spokes on an imaginary
wheel. The spokes need not be of the same length, i.e. limit,
and a company may have more than one spoke. (A ceding company,
as well as a reinsurer, may use this procedure.) Contrast with
Pool. See also Layering
and Reinsurance Facility.
- An insurance company that accepts the risk transferred from
another insurance company in a reinsurance transaction. Also
called the Assuming Company.
Adjustment Interest Rate
- In modified coinsurance, the interest rate used to calculate the
amount payable by the ceding company in consideration of the
reserves being held by the reinsurer. See Mod-co
- Reserves are liabilities for amounts an insurance company is
obligated to pay in acccordance with an insurance policy or annuity
contract. Reserves are established for both matured and
unmatured obligations of an insurance company. Reserves
represent the present value of future expected payments less future
- The dollar amount or percentage of risk retained by the ceding
company under a reinsurance agreement.
- To cede insurance risk from one reinsurer to another reinsurer.
- A reinsurer that contractually accepts from another reinsurer a
portion of the ceding company's underlying reinsurance risk.
The transfer is known as a retrocession.
- Risk Charge
- An amount identified in some reinsurance agreements as
specifically to be retained by the reinsurer for assuming the risk
under the policies reinsured; a share of the profits in excess of
the risk charge is returned to the ceding company as an experience
refund. Also known as profit and expense charge, risk and
profit charge, or risk and expense charge. See Experience
Refund and Profit
- Risk and
- See Risk Charge.
Premium Reinsurance (RPR)
- See Yearly
Renewable Term (YRT) Reinsurance.
- Risk and
- See Risk Charge.
Glossary of Reinsurance Terms compiled by
the American Council of Life
and presented by Central Security Life Insurance Company (CSLIC).
This text, or any part thereof, may not be reproduced or transmitted in any
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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
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types of professional business management advice. If legal advice or other
expert assistance is required, the services of a competent professional should