THE COMPANY

Reinsurance
Terms

  • Natural Expiry

    Termination of reinsurance on a run-off basis, i.e., reinsurance continues until the expiration of policies reinsured according to their original expiration dates.

  • Net and Treaty

    The amount of the reinsured's loss retention for its own account (without reinsurance), plus its reinsurance for a given risk or a book of business.

  • Net Line

    The amount of insurance the primary company carries on a risk after deducting reinsurance from its "gross" line.

  • Net Loss

    The amount of loss sustained by an insurer after making deductions for all recoveries, salvage, and all claims upon reinsurers with specifics of the definition derived from the reinsurance agreement. Such net loss may or may not include claim expenses. As provided in the reinsurance agreement, net loss can be confined to the amount paid by the reinsured within applicable policy limits, or it can also include amounts paid by the reinsured for compensatory damages in excess of applicable policy limits because of failure of the reinsured to settle within applicable policy limits.

  • Net Retained Liability

    The amount insured which the reinsured retains net for its own account and unreinsured in any way, usually a defined term, qualified as required by the reinsurance contract in which it appears. See Surplus Liability.

  • Net Retained Lines Clause

    Explains that the loss subject to the reinsurance agreement is net of all other reinsurances, whether collectible or not, as well as net of salvages and all other reinsurance recoveries due, of the reinsured.

  • Net Loss Retention

    The amount of loss which an insurer keeps for its own account and does not pass on to another insurer (or reinsurer). In excess of loss reinsurance, the term "first loss retention" may be preferred.

  • New and Renewal Business

    Insurance policies (exposures or risks) whose terms of insurance begin or continue during a reinsurance contract period of time, with or without reinsurance coverage.

  • Nonadmitted Assets

    Assets owned by an insurance company which are not recognized for solvency purposes by state insurance laws or insurance department regulations, e.g., premiums due and uncollected past ninety days, and furniture and fixtures, among others.

  • Nonadmitted Company

    1. An insurer not licensed in a given state.
    2. A reinsurer not licensed or approved in a given state.
  • Nonadmitted Insurance

    Insurance protection placed in a non-admitted insurer.

  • Nonadmitted Reinsurance

    Reinsurance protection bought by a reinsured company from a reinsurer not licensed or otherwise authorized to transact the particular line of business in the jurisdiction in question. No credit is given to the company for such non-admitted reinsurance in its Annual Statement unless it withholds funds or holds a letter of credit on behalf of such unauthorized reinsurer, as shown in Part 2 of Schedule F of the Annual Statement. See Penalty for Unauthorized Reinsurance.

  • Nonproportional Reinsurance

    Reinsurance in which the reinsurer's response to a loss depends on the size of the loss, so named because the premium in non-proportional reinsurance is not proportional to limits of coverage. Also known as Excess of Loss Reinsurance.