Chapter 9 Flashcards
Non Mortality risks covered by financial reinsurance (5)
- policy persistency
- interest
- cash values
- reserve requirements
- secondary guarantees
- return of premium
Major Factors Contributing to the continued decrease in reinsurance production
- Mergers and acquisitions
- Pressures by shareholders for higher profits
- higher reinsurance costs
- more formalized, detailed, and explicit treaty language
- increaes in underwriting and clais audits
Generally reinsurance liability begins when?
At the same time as the ceding company’s liability.
4 key factors in reinsurance pricing
- Product
- Market
- Distribution System
- Underwriting
5 categories of reinsurance benefits
- capacity
- prevention of catastrophic loss
- market entrance
- market withdrawal
- Reinsurance services
A reinsurance agreement by which one company permanently transfers full responsibility for a block of policies to another company
Assumption reinsurance
A form of reinsurance in which the ceding company is obligate to cede, and the reinsurer is obligated to assume, risks that meet specific criteria based on the provisions of the reinsurance treaty.
Automatic reinsurance
In reinsurance, the document that describes the risk transferred
cession
Specialized reinsurance transacted primarily to achieve financial goals, such as capital management, tax planning, or the financing of policy reserves
financial reinsurance
Retention limit
a specified maximum amount of insurance that a life insurer is willing to carry at its own risk on any one life without transferring some of the risk to another insurance company
Risks ceded by a reinsurer
Retrocession
A reinsurer that contractually accepts from another reinsurer a portion of the ceding company’s underlying reinsurance risk.
Retrocessionaire
A form of life reinsurance under which the risks, but not the permanent plan reserves, are transferred to the reinsurer for a premium
YRT
