Retrocede/retrocession: When a reinsurer transfers part of its liability to another reinsurance seller, that reinsurer will reside retroactively to its operations. The retrocession is therefore a reinsurance. (Retrocedant-party purchase retrocession cover;retrocession portion sale retrocession cover). Adaptation premium: premium payable at the expiry of a surplus reinsurance contract. The adjustment depends on the minimum premiums and the deposit premiums agreed upon for this contract. Disaster excess: a form of excess reinsurance greater than a declared withholding to another identified amount. The contract protects policyholders from aggregation of losses resulting from a catastrophic event normally caused by natural or fundamental hazards. The definition of loss could be an “ultimate net loss, a loss event” and could then be refined by the addition of extended event hours and expiry clauses, as well as an (original) risk guarantee clause, whether implied or imposed. Excess: a non-proportional form of reinsurance that compensates the reinsurer for the part of a loss in excess of a certain amount of money (deductible, exceeding or withholding) up to another specified amount of money (responsibility or compensation ceiling). Risk (or overwork) of losses: A surplus can be tolerated when reinsurers expect individual risk losses to affect a given stratum. When reinsurers expect a high frequency of losses, these positions are called overwork.
The excess risk of loss contracts generally includes the provision of “ultimate net loss for each individual loss, each risk” and would be subject to the insured`s definition of “every risk” for the purposes of the reinsurance contract. Disposal: the amount of liability transferred to reinsurers under a proportionate reinsurance contract. The risk, premium, commission and receivables are paid according to the amount of the assignment, which is normally expressed as a percentage. Firm Order Instruction: After receiving various offers for a reinsurance contract, the insurer`s management team decides the exact terms of sale and issues a firm purchase order through participating reinsurance to conclude the offering of this agreement with the following major contracts and contracts offered through the intermediary. The reinsurer`s liability generally covers the entire life of the original insurance once it is written. However, the question arises as to when one of the parties will be able to cease reinsurance for future new transactions.