Category: Blog

  • Acquisition costs:

    Acquisition costs:

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    Costs incurred for acquiring the insurance and reinsurance accounts such as Insurance taxes, Fronting commission, Brokerage etc., EXAMPLE: > Commissions paid to a Broker or Fronting company.

  • Contractors All Risks (CAR):

    Contractors All Risks (CAR):

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    Written in connection with construction projects outside the United States, these nonstandard policies typically consist of three coverage parts. Example: • Suppose you are a contractor hired to build a new hotel in a foreign country. During the construction, a storm causes severe damage to the building and the material on site. Your CAR policy…

  • Brokerage:

    Brokerage:

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    Fees paid to an intermediary for facilitating the transaction between the insurer and the captive. EXAMPLE: > If a group captive pays 5% of the premium to a broker for finding and placing business with an insurer, this is a Brokerage Fee.

  • Captive:

    Captive:

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    A captive Insurance company is a legal entity formed primarily to ensure the risks of one corporate parent or a number of similar corporations(e.g., trade associations), there by contributing to a reduction in its parent’s (“total cost of risk”). Captives are licensed by many jurisdictions. The captive’s primary jurisdiction is known as its Domicile. Example:…

  • Bordereaux(Bord):

    Bordereaux(Bord):

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    List of all incurred claims which includes payment and (OSLR) details. EXAMPLE: > A loss Bordereaux provides details on any losses and claims that have been made, and what amount the insurer has paid. A premium bordereaux lists all of the items that are protected under the reinsurance contract.

  • Admitted Insurance:

    Admitted Insurance:

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    insurance written by an insurer licensed to do business in the state or country in which the insured exposure is located. EXAMPLE: • A captive insurance company registered in Oklahoma, USA that wants to cover its parent’s workers compensation risk in any other state in USA must obtain an admitted insurance policy from a licensed…

  • Subrogation:

    Subrogation:

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    Subrogation refers to the proceeds of negotiation or legal actions against negligent third parties and may apply to either property or casualty coverage. Example: If there is a fire at one of the company’s facilities and the captive insurer pays for the damages, it can then pursue subrogation against the party responsible for causing the…

  • Re – Insurance Premium Written:

    Re – Insurance Premium Written:

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    Re-Insurance premium written is the amount of reinsurance premium thata ceding company records on its books in a given period of time. Example: If a company B pays reinsurer C $100,000 for a reinsurance policy that coversthe year 2023, and the policy is issued and paid in January 2023, then company B’s reinsurance premium written…

  • Non-Admitted-Insurance:

    Non-Admitted-Insurance:

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    Insurance written by an insurance company not licensed to do businessin a certain state or country. In US jurisdictions such insurers can nevertheless write coverage through an excess and surplus lines brokerlicensed in that jurisdiction. Example: Non- Admitted insurance can create specialty policies. They also cover higher-risk policies and ensure high-risk individuals who admitted companies…

  • Losses paid

    Losses paid

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    Losses paid, or claims paid are the amounts that a captive insurance company pays to its insureds or to third party reinsurers for the losses that occur under the policies that the captive issues. Example:If Company A forms a captive insurance company, Captive A, to insure its ownrisks, and company A suffers a property damage…