REINSURANCE: 1) In reinsurance or retrocession business (typically proportional treaties) an allowance paid to the ceding company over and above the actual acquisition and related cost to produce and underwrite the original business.
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UK: 1. An additional commission payable to particular intermediaries who introduce a large volume of profitable business to the insurer. 2. Discount granted by a reinsurer to an intermediary or cedant to cover the cedant’s overhead expenses. To prevent a ceding office from writing business and reinsuring 100 per cent as a full-time activity for the sake of the underwriting commission, established reinsurers usually insist that the cedant retains a reasonable proportion of the business for their own account.
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A commission paid to an agent or broker on business sold by subagents in his or her territory. This term can also refer to an amount paid to a ceding company in addition to the acquisition cost to compensate for overhead expenses.
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A commission that is paid by a reinsurer to the reassured to cover the latter’s overheads in administering the reinsurance.
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UK: an allowance paid to a ceding company over and above the acquisition cost to allow for additional expenses.