Reinsurance

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Reinsurance

The spreading of risk and division of client premiums among insurance companies allowing the sharing of the burden of a large risk.

Reinsurance

An insurance policy for insurers. In reinsurance, one insurer cedes a portion of its portfolio of policyholders to another insurer in exchange for paying a fee. There exists the possibility that too many policyholders will make a claim and a single insurer will be unable to pay the benefit without ruining itself. This is especially true for disaster insurance and other similar policies. Reinsurance reduces this risk. It is also called stop-loss insurance.

reinsurance

see INSURANCE COMPANY.
References in periodicals archive ?
Many commissioners were originally pushing for an update to the NAIC stop-loss model act to include "aggressive new restrictions for stop-loss insurance," Ferguson said, noting the effort failed to secure the needed support.
There's a lot of debate about how to define an insured plan versus a self-insured plan, and one of the factors is shifting the risk and at what point the stop-loss insurance starts paying claims.
Over the past year, federal regulators from the IRS, HHS and DOL have all expressed concerns that smaller employers rely on stop-loss insurance with “low” attachment points to self-insure in order to escape various state and federal regulatory requirements.
Our members who face the prospect of state assessments on stop-loss insurance can take heart from this summer's ruling by the Minnesota Supreme Court that denied state collection of premium-based assessments.
But in the last few years, reinsurance companies made self-funding practical for thousands of small companies by offering stop-loss insurance at levels appropriate for smaller firms.
Inquire among the better stop-loss insurance carriers and agents about the reputations of any TPAs they deal with.
The video, "Self-Insurance 101: A Practical Guide," which provides background on self-insurance trends and medical stop-loss insurance, is also available on www.
Stop-loss insurance mitigates risk by insuring the self-funded employer against unexpected increases in overall plan utilization or the impact of a single catastrophic claim.
Another benefit is that group members can self-insure their health insurance plans, then form the RRG to provide excess coverage for their health plans--in effect replacing stop-loss insurance.
Lincoln Re Risk Management Services is expanding its Special Alternatives program of claims management tools for the employer stop-loss insurance market to include comprehensive case management services from Des Moines, Iowa-based Encompass Health Management Systems and transplant access through InterLink Health Service Inc.
Under self-funding, you generally buy stop-loss insurance to protect yourself against the very big claim," Cuppett explains.