![]() 1,034,884,645 visitors served. |
|
![]() Dictionary/ thesaurus | ![]() Medical dictionary | ![]() Legal dictionary | ![]() Financial dictionary | ![]() Acronyms | ![]() Idioms | ![]() Encyclopedia | ![]() Wikipedia encyclopedia | ? |
Finite Reinsurance |
0.04 sec. |
|
Finite Reinsurance A type of reinsurance that transfers over only a finite or limited amount of risk. Risk is reduced through accounting or financial methods, along with the actual transfer of economic risk. By transferring less risk to the reinsurer, the insurer receives coverage on its potential claims at a lower cost than traditional reinsurance. Notes: For example, an insurer will set aside an amount to cover a percentage of the payouts if the risk is realized. Only when the amount does not cover the payouts will the reinsurer cover the risk. This limits the potential risk that the reinsurer faces and leads to lower costs for the insurer. The amount set aside is usually invested in government bonds and provides income that is put against potential claims. Due to the highly complex structure of these risk instruments, there can be abuses where no risk is transferred and the insurer's income is improved. |
|
? Mentioned in | ? References in periodicals archive | |
|---|---|---|
| He says finite reinsurance arrangements, for example, a practice that regulators said insurers used to illegally smooth earnings, have a place in the insurance industry, and that he's pleased the National Association of Insurance Commissioners is working to set up rules that would clarify the issue. The rating action reflects a reduced level of uncertainty following a series of restatements over the past nine months related to the company's finite reinsurance contracts and for numerous other accounting errors. Finite reinsurance is a type of reinsurance that transfers a finite or limited amount of risk to the reinsurer, according to the NAIC. |
| Free Tools: |
For surfers:
Browser extension |
Word of the Day |
Help
For webmasters: Free content | Linking | Lookup box | Double-click lookup | Partner with us |
|
|---|