A provision in a reinsurance agreement designed to allocate loss from a single occurrence between two or more reinsurance contract periods. The provision prorates the reinsured’s retention and reinsurance coverage between two or more reinsurance agreement periods, i.e., when one loss affects policies assigned to different reinsurance periods, so that the company will have one retention and one recovery for the loss involving the two reinsurance periods.
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UK: Clause applicable to ‘risks attaching’ reinsurances. The clause allows apportionment of a loss between years of account when a loss arises on policies attaching to different underwriting years. This is achieved by proportionately reducing the deductible and the reinsurer’s liability for each of the two years by the percentage that the loss to each year of account bears to the total amount of the loss.