Page 332 - Reinsurance Management IC85

Reinsurance Management

In insurance, the gross amount of loss occurring to an insured
and subject to the insured's insurance policy, beginning with the
first dollar of loss and prior to the application to the deductible
or deduction, if any, required by the policy.

Hard Market

A scarcity of a product or service for purchase, as opposed to a
soft market, in which the product or service is available readily
and easy to buy. In reinsurance, a hard market is characterized by
prudent underwriting and adequate pricing, whereas a soft market
reflects sloppy underwriting and deficient pricing.

Hours Clause

The colloquial term which limits the time period during which
claims resulting from a given occurrence may be included as
part of the loss subject to the cover. The time period is usually
measured in consecutive hours and most often applies to property
reinsurance, e.g., a windstorm, conflagration, or earthquake, and
less frequently in occupational disease and other aspects of
casualty.

Incurred But Not Reported (IBNR)

The liability for future payments on losses which have already
occurred but have not yet been reported in the reinsurer's records.

Insolvency Clause

A provision now appearing in most re-insurance contracts (because
many states require it) stating that the reinsurance is payable, in
the event the reinsured is insolvent, directly to the insurer or its
liquidator without reduction because of its insolvency or because
the insurer or its liquidator has failed to pay all or a portion of
any claim.

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