Category: Uncategorized

Trailer interchange insurance is a type of trucking auto liability insurance that provides financial coverage for physical damage that may be caused to a trailer while it is being hauled by a party that does not own said trailer. Trailer interchange insurance functions similarly to cargo insurance. Example:

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…

Losses or Claims that pay out very quickly. These are losses that arise from events that have a short latency period or a short settlement period. EXAMPLE: Life insurance, Property damage and Automobile liability claims.

RRGS are state chartered and are exempt from having to obtain a state license in every state in which they operate, and also are exempt from state laws that regulate insurance. They are mutual companies, meaning that they are owned by the members of the group. Members of an RRG must be engaged in similar…

The difference between the premium of all the policies and the aggregate loss of all the policies for a particular captive. Example: • If a captive has $10 million in premiums and $8 million in losses, the risk gap is $2 million.

Reinsurance is the transfer of risk from a ceding insurer to a reinsurer. Reinsurance is the insurance of the risks undertaken by insurance companies. Reinsurance company issues the insurance contract to the primary/ceding insurance company. Need for reinsurance: EXAMPLE: Primary insurance company can increase its capacity and issue policy for high value risks/loss, by reinsuring…

Re-Insurance premium written is the amount of reinsurance premium that a 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 covers the year 2023, and the policy is issued and paid in January 2023, then company B’s…

• The reinsurer agrees to take on a specific percentage share of policies, for which it will receive that proportion of premiums. Original risks, premiums, and claims in a pre-agreed proportion are shared/ceded – it is Risk sharing. • High volume of business but low profit margin. Example: • Quota share treaty is a purest…

Profit commissions are provisions found in some reinsurance agreements that provides for profit sharing. Parties agree to a formula for calculating profit, an allowance for the reinsurer’s expenses, and the cedant’s share of such profit after expenses. Example: • If a reinsurer agrees to pay 20% of its net profit to the cedant after deducting…

This type of insurance coverage designed to protect traditional professionals(e.g., physicians) and quasi professionalse.g., real estate brokers) against liability incurred as a result of errors and omissions in performing professional services. Example: • A Doctor misdiagnoses a patient’s persistent headaches as stress-related and advices rest. The patient later has a stroke and discovers that the…