Am looking for a reinsurance

Posted: Thu Dec 09, 2010 02:39 am Post Subject:

Involuntary unemployment insurance is quite popular for covering the personal loans. It's your involuntary income loss which takes care of your loan payments in the event you get laid off. So, are you being laid off recently?

Posted: Thu Dec 09, 2010 03:40 am Post Subject:

Unless you are an insurance company, you are unlikely to obtain reinsurance agreements from any reinsurance company.

Posted: Fri Dec 10, 2010 12:34 am Post Subject:

Max, that's an important piece of information! An agreement between an insurer and a re-insurer - is it in any ways different than the usual types of insurance agreements?

Posted: Fri Dec 10, 2010 01:56 am Post Subject:

Well, when you talk about "reinsurance" in the commercial insurance world, you're talking about premium rates based on PER $1,000,000 of protection, compared to life or property & casualty insurance where rates are usually stated as PER $1,000 of protection.

And reinsurers also reinsure their risk, too. So the whole thing that is taking place "behind the scenes" is very complex and can be many layers deep. It is about as highly regulated as the primary insurance market, but much less visibly so to the public, because the public normally has no direct contact with any reinsurers. Their contract is only with the primary insurer.

There are also two main forms of reinsurance agreements, TREATY and FACULTATIVE. A treaty allows a primary insurer to cede as much risk to its reinsurer as they choose, because it will all be accepted. A facultative agreement may allow the reinsurer to apply its own underwriting criteria to the risk being ceded (a "right of first refusal"). Life insurance being reinsured under a facultative agreement is sometime harder to reinsure if the risk is substandard, or the primary insurer's underwriter has ignored the height & weight guidelines or other basic underwriting standards.

Reinsurance is a whole different level of activity compared to the insurance we typically think of or have. There are also things known as "STOP LOSS" contracts for self-funded employee benefit plans or other self-insured risks (such as workers' compensation). While they resemble reinsurance in most ways, they are not obtained in the reinsurance marketplace.

The one thing to know about reinsurance is this: without reinsurance, the commercial insurance business would have been out of business a long time ago.