Page 333 - Reinsurance Management IC85

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Intermediary Clause

A provision in a reinsurance contract which identifies the
specific intermediary or broker involved in negotiating the
contract, communicating information, and transmitting funds.

Jurisdiction Clause

A clause inserted in a treaty wording defining the laws under
which any dispute shall be resolved.

Law of Large Numbers

A mathematical concept which postulates that the more times an
event is repeated (in insurance, the larger the number of
homogeneous exposure units), the more predictable the outcome
becomes. In a classic example, the more times one flips a coin,
the more likely that the results will be 50% heads, 50% tails.

Layer

The total amount of excess of loss reinsurance protection which a
insurer needs to protect a given set of exposures is usually not
written in one contract.

Lead (or Leading) Underwriter

The individual (or organization) with a major role in negotiating
the terms and conditions of a reinsurance cover and whose
reputation and standing are such that other underwriters respect
his or her ability, skills, and judgment and will often follow the
terms and conditions set by the lead without further negotiation.

Limits

The maximum amounts of interest insured. The word can be used
to describe a cedant's retention, a cedant's gross capacity or the
maximum amount which may be reinsured under a reinsurance
contract.

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