REINSURANCE: A form of excess of loss reinsurance which, subject to a specific limit, indemnifies the ceding company in excess of a specified retention with respect to an accumulation of losses to multiple insureds and/or policies resulting from an occurrence or series of occurrences arising from one or more disasters
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A form of reinsurance that indemnifies the ceding company for the accumulation of losses in excess of a stipulated sum arising from a single catastrophic event or series of events.
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UK: An excess of loss reinsurance which, subject to a specified limit, indemnifies the reinsured for the amount of loss in excess of a specified retention, the excess point, with regard to an accumulation of losses caused by a catastrophic event (e.g. a hurricane) or series of events. The reinsurance document is referred to as a catastrophe cover. See HOURS CLAUSE.
Insurance Encyclopedia
Catastrophe reserves
A reserve created by an insurer as a safeguard against exceptionally poor claims experience. The reserve is created out of prudence and not in pursuance of regulatory requirements. The term is used colloquially.
Catastrophe Risk (CAT)
Cat risk can be caused by natural catastrophes, such as hurricanes in the US, storms or floods in the UK/Europe, and earthquakes in Japan, or manmade catastrophes, such as a big potential volatile risk like cyber or the pandemic.
Catastrophe securitisation
See: Catastrophe Bonds.
Catastrophe swaps
A reinsurer swaps part of his portfolio, e.g. earthquake in Japan, with the Florida hurricane exposure of another reinsurer, each wishing to diversify his or her portfolio. The term also describes an arrangement between an insurer and an investor. The insurer agrees to make periodic payments to another party who agrees to make payments to the insurer if defined catastrophes occur, but there is no exchange of principal. See WEATHER SWAPS.
Catastrophic
Term that refers to an illness that has the potential to financially ruin an individual or his or her family because of the high cost of medical care.
Catastrophic cap
Maximum dollar amount that an active-duty family member has to pay out of their pocket under TRICARE for covered medical services in any fiscal year or enrollment period.
Catastrophic case
Severe medical injury or prolonged illness where the total cost of treatment will exceed the amount specified in the managed care contract.
Catastrophic case management
Ongoing review of cases that involve patients who encounter catastrophic or very high medical expenses. Sometimes referred to as large case management. See case management.
Catastrophic claim
Request for health benefits coverage for a case of severe injury or prolonged illness where it is foreseen that there may be very high medical expenses involved.