A method of tracking reinsurance contract experience by matching all losses occurring during a given 12-month period (regardless of when the losses are reported) with all premium earned during the same period (regardless of when the premium was written).

Viewed from another perspective: the total value of all losses occurring during the defined 12-month period (losses paid plus loss reserves) is divided by the earned premium for the same period. As the experience is developing, loss reserves are used in the calculation, but the ultimate result cannot be finalized until all losses are settled. While any 12-month period can be used to define the exposure period, the year beginning January 1 is normally used.

The individual, either as employee of a reinsurer or a reinsurance intermediary, responsible for all matters pertaining to the reinsurance account of a particular insurer.

This is the most common and widely understood method. The unearned premium reserve at the beginning of the period is added to the premium written (booked) during the period, and the unearned premium reserve at the end of the period is subtracted. Accounting earned is the figure used in the Annual Statement.

All expenses incurred by an insurance or reinsurance company which are directly related to acquiring insurance accounts (direct or assumed) for the company.

Costs incurred in conducting an insurance operation other than loss adjustment expenses, acquisition costs, and investment expenses.

Assets recognized and accepted by state insurance laws in determining the solvency of insurers or reinsurers.

An insurer licensed to conduct business in a given state, or a reinsurer approved to conduct business in a given state.

An amount paid by a reinsured to a reinsurer which is held for the payment of the cedant's losses. At some time in the future, any balance in the fund remaining after paying losses and any agreed reinsurance expenses will be returned to the reinsured. Also known as Banking Plan.

The amount charged at the start of a treaty, to be adjusted later. Also known as Deposit Premium or Provisional Premium.

The conscious and deliberate cession of those risks, segments of risks, or coverages that appear less attractive for retention by the ceding company.

1) A designation that identifies the reinsurance of one or more of an agent's policies, with the agent acting for the ceding insurer under its authority.

2) A contract of reinsurance between an insurer and a reinsurer that concerns or is confined to business produced by a named agent of the ceding insurer, usually generated by that agent and administered directly with the reinsurer with permission of the insurer. While there are other reasons for the practice, the usual intent is to allow an agent to issue larger policies than the insurer would otherwise permit.

In primary insurance, an amount paid an agent for insurance placement services.

A form of per-risk excess reinsurance under which the primary company retains its normal retention on each risk and additionally retains an aggregate amount of the losses which exceed such normal retention.

An insurer or reinsurer domiciled outside the United States but conducting an insurance or reinsurance business within the United States.

Synonymous with payback period, this term is used in the rating of per-occurrence excess covers and represents the number of years at a given premium level necessary to accumulate total premiums equal to the indemnity.

A summary of an insurance company's (or reinsurer's) financial operations for a particular year, including a balance sheet supported by detailed exhibits and schedules, filed with the state insurance department of each jurisdiction in which the company is licensed to conduct business.

A provision sometimes appearing in reinsurance treaties whereby the parties agree to submit any dispute or controversy to an unofficial tribunal of their own choosing in lieu of the tribunals provided by the ordinary processes of law. Although the wording of the clause may vary, it normally provides for the appointment of two arbitrators, one selected by each party, who in turn appoint an umpire, and the decision of a majority of the arbitrators is binding on the parties to the reinsurance treaty.

To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure.

The transfer of in-force insurance liability by an insurer to a reinsurer (or vice versa) by the payment of the unearned premium reserve on those policies alone, or by the concurrent transfer of liability for outstanding losses under those policies by the payment of the outstanding loss reserve by the insurer to the reinsurer (or vice versa). The former is a premium portfolio, the latter a loss portfolio.

Another name for cut-through endorsement.

The amount at which excess reinsurance protection becomes operative; the retention under an excess reinsurance contract.

Reinsurance placed with a reinsurer is licensed or otherwise recognized by a particular state insurance department.

An agreement between the reinsured and the reinsurer (usually for pro rata reinsurance, and usually for one year or longer), whereby the ceding company is obligated to cede certain risks as provided in the agreement and the reinsurer is obligated to accept.