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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

reinsurance

see INSURANCE COMPANY.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
References in periodicals archive ?
The stop loss insurance would cover unemployment costs between $10,000 and $40,000, protecting the agency from unexpectedly absorbent SUI costs.
He is a welcome addition to an already exceptional group of people who share a passion for stop loss insurance and providing optimal solutions for our customers.'
Hirsch continued, "While many of the changes become effective in the future, self-funded plans need to be proactive today; exploring their options for medical stop loss insurance, evaluating their third-party administrators to assess their capabilities for assisting with the new regulations and finally, taking steps to better contain health risks through effective medical management."
"The attachment points in the Stop Loss Insurance Model Act have not been revised since the model was adopted in 1994," Goe says.
"If a state passes legislation that includes very high limits on stop loss insurance for small employers, such as currently proposed by the [ERISA] Subgroup, then, all other factors being equal, a small employer who anticipates good claims experience will have more financial incentive to self-fund their claims."
In the RFI, federal officials ask a number of questions about use of stop-loss insurance by small groups, such as "What are common attachment points for stop loss insurance policies?"