mccloskey (3501) topic 6 notes

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mccloskey (3501) topic 6 notes
2014-10-28 20:41:52
rmi 3501

mccloskey topic 6 cards
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  1. Reinsurance
    • Insurance on Insurance
    • Insurer transfers some or all risk to the reinsurance company
    • Insurer cedes loss exposure to reinsurer
  2. what is another name for a reinsurer
    a cedent or ceding company
  3. ceding commission
    A fee paid to the primary insurer in consideration of placing the business and fees they incur
  4. the fees that a primary insurer incurs
    • state premium tax
    • agent commissions
    • operating costs
  5. retrocession
    when a reinsurer transfers some of its risk to other reinsurers
  6. reinsurance benefits to policyholders(3)
    • Collect Losses directly from one insurer
    • Stabilize primary insurers’ finances
    • Allows small insurers opportunity to compete with larger insurers (Insureds can get better options & Prices)
  7. how does reinsurance stabilize the primary insurer's finances?
    It reduces the chance of insolvency
  8. is the policyholder a party to the reinsurance agreement?
  9. who is usually solely required to indemnify a policyholder?
    the primary insurer(regardless of whether the insurer has reinsurance or not)
  10. cut through endorsement
    in the event of primary insurer insolvency, the reinsurer assumes obligation
  11. Professional reinsurer
    reinsures primary insurers
  12. Reinsurance department of primary insurer
    reinsurance function exists within an insurer that also operates a primary insurer operation.
  13. Reinsurance Pools, Syndicates and Associations
    Unrelated group of insurers that underwrite or share reinsurance exposures