A method of reporting the financial results of an insurer more in accordance with the going-concern basis used by other businesses. GAAP assigns income and disbursements to their proper period, as distinguished from the more conservative requirements of statutory accounting affecting insurers.

[See Subject Premium]

The usual rating base for excess of loss reinsurance. It represents the earned premiums of the primary company for the lines of business covered net, meaning after cancellations, refunds, and premiums paid for any reinsurance protecting the cover being rated, but gross, meaning before deducting the premium for the cover being rated.

Gross written premium less only returned premiums and less premiums paid for reinsurance which inure to the benefit of the cover in question. Its purpose is to create a base to which the reinsurance rate is applied. Same as GNEPI, except premiums are written instead of earned.

[See Subject Premium]

A surplus share treaty under which the capacity expressed as a number of lines varies according to class or the net retained line of the ceding insurer.

The amount of liability an insurer has written on a risk including the amount has reinsured. Net line plus reinsurance equals gross line.

The total amount of loss sustained before deductions are applied for reinsurance covers which inure to the benefit of the cover being considered and before the application of a deductible, if any, because that base theoretically reflects changes in exposure.

An addition to an insurance policy (between an insurance company and a policyholder covering the policyholder's mortgaged property) which requires that, in the event of the company's insolvency, the mortgagee and/or the policyholder be paid directly by the reinsurer either for any loss covered by reinsurance or (as if often provided) for the full insurance protection afforded by the insurance company. Since the full insurance protection afforded by the insurance company may be above the reinsurance which would be payable to a reinsured company, the reinsurer may be assuming an additional risk in such an endorsement. Similar to the cut-through endorsement, the guarantee endorsement is also known as a Mortgagee Endorsement.