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Fine Print

A reference to imaginary small type in a policy contract supposedly containing exclusions, reductions, exemptions and limitations of the coverage. In some Countries the Insurance Authority or Government prescribes specifications for the minimum type size that can be used in a policy, and they also provide that exclusions cannot be printed in type smaller than that used to print the benefits.
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Small-size type in a contract that is purported to contain omissions, exemptions, and coverage limits. State laws largely prohibit printing exclusions in smaller font than that used for the rest of the contract. Laws also mandate the size of font that must be used in contracts.

Finite quota share

Proportional multiyear reinsurance differing from a conventional quota share. The insurer cedes an agreed percentage of unearned premium but the reinsurer’s liability is finite, i.e. capped by an aggregate amount. The reinsurance is structured to assist the cedant’s solvency position by paying a large amount of commission in the early stages and smaller amounts at the end.

Finite Reinsurance (also known as Financial Reinsurance, Limited Risk Reinsurance, Nontraditional Reinsurance, Structured Reinsurance)

A broad spectrum of treaty reinsurance arrangements that provide reinsurance coverage at lower margins than traditional reinsurance, in return for a lower probability of loss to the reinsurer. This reinsurance is often multi-year and often provides a means of sharing positive or negative claims experience with the cedent beyond that usually provided by traditional reinsurance.

Finite risk reinsurance

Similar to financial reinsurance but has more risk transfer. It is a retrospectively rated rein surance in which the reinsurer’s liability is finite, i.e. capped. The multi-year contract enables the reinsurer to smooth the cedant’s losses over time by providing funds for paying losses that are eventually restored to the reinsurer under an adjustable clause. The cedant gets credit enhancement by an improvement in key ratios. Investment income is an underwriting component. Finite products include: finite quota share; loss portfolio transfers; time and distance; adverse development cover; spread loss cover; financial quota share.
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A form of retrospectively rated reinsurance in which the reinsurer’s ultimate liability over the term of the contract is typically limited to no more than 300 percent of the premium ceded. Its primary objectives are to stabilize earnings and reduce reinsurance costs.

FIO

The Federal Insurance Office, established by the Dodd-Frank Act, was created to provide federal oversight of the insurance and reinsurance industries, although FIO does not have regulatory authority. FIO, along with state insurance regulators, participates at the IAIS on international regulatory issues and has the express authority, along with U.S. Trade Representative, to negotiate covered agreements with one or more foreign jurisdictions on prudential matters with respect to the business of insurance or reinsurance. FIO is also tasked with the development of various reports to Congress on insurance issues, including how to modernize the U.S. system of regulation, a report on the global reinsurance market, and a report on the impact of the NRRA on state insurance regulators.