A concept in surplus share reinsurance dealing with the relationship between written premium under the treaty and the maximum limit of liability to which the reinsurer is exposed. The precise relationship will vary from treaty to treaty, but if the ratio desired for a specific treaty is achieved, the treaty is referred to as "balanced."

An agreement in which the ceding company pays the reinsurer a premium over a specified number of years which is intended to fully fund a specific limit of liability. If the premium is not fully expended by payment of losses within the contract period, the unused portion is returnable, less a reinsurance expense. Also known as Advance Deposit Premium Plan.

The ceding company's premiums (written or earned) to which the reinsurance premium rate is applied to produce the reinsurance premium. Also known as Subject Premium, Premium Base, and Underlying Premium.

The minimum amounts of insurance for which it is the practice to quote premiums in liability insurance. Additional amounts are charged for by the addition of certain percentages of the premium for the minimum (or basic) limits.

A record of reinsurance arrangements pending the issuance of a formal reinsurance contract (which then replaces the binder).

Furnished basically by the reinsured, a detailed report of reinsurance premiums or reinsurance losses. A premium bordereau contains a detailed list of policies reinsured under a reinsurance treaty during the reporting period, reflecting such information as the name and address of the primary insured, the amount and location of the risk, the effective and termination dates of the primary insurance, the amount reinsured and the applicable reinsurance premium. A loss bordereau contains a detailed list of claims and claims expenses outstanding and paid by the reinsured during the reporting period ,reflecting the applicable amount of reinsurance indemnity . Bordereau reporting is primarily applicable to pro rata reinsurance arrangements and, to a large extent, has been supplanted by summary reporting.

An intermediary who negotiates reinsurance contracts between a reinsured and reinsurer on behalf of the reinsured, receiving commission for placement and other services rendered. Under the terms of one widely used intermediary clause, premiums paid a broker by a reinsured are considered paid to the reinsurer, but loss payments and other funds (such as premium adjustments) paid a broker by a reinsurer are not considered paid to the reinsured until actually received by the reinsured.

An amount paid a broker for insurance or reinsurance placement and other services.

A collective reference to those reinsurers that accept business mainly through reinsurance intermediaries.

Used in casualty insurance to describe a coverage layer between the maximum policy limit which the primary underwriter will write and the minimum deductible over which the excess or umbrella insurer will cover.

The ratio of actual past reinsured losses to a ceding company's subject premium (written or earned) for the same period. Used to analyze past reinsurance experience or to project the future.

In primary insurance, the ratio of losses suffered to the amount of insurance in effect. Thus, not a "loss ratio," which is the ratio of losses incurred to premiums earned.