A reinsurance contract which allows the reassured to select which risks of a given type are to be ceded to the reinsurer. The reinsurer is obliged to accept all the cessions made by the reassured provided they fall within the scope of the treaty.

Insurance Policy that cover risk of failure of well which includes shallow tube wells, dug-wells, filter points, bore wells etc., used for developing ground water. The well shall be deemed to have failed completely if it fulfills conditions as mentioned in the policy and the indemnity will include the expenditure actually incurred by farmers toward boring/digging of the well, net of margin money and/or subsidy received subject to 80% of the amount of admissible claim. Policy does not cover quality of water and structural failure, flood, earthquake and other convulsions of nature, riot and strike risks.

Procedure for identifying possible failures or malfunctions of each component of a system, along with the immediate cause (mode) failure or malfunction (e.g., switch jammed in the “on” position). The effects of the failure are traced through the system, and the ultimate effect on the system’s performance is evaluated.

Marine Insurance Contracts : Return of premium, Marine Insurance contracts: As per sec. 84 of the Marine Insurance Act-(01) Where the consideration for the payment of the premium totally fails and there has been fraud or illegality on the part of the assured, or his Agent the premium is thereupon returnable to the assured. (02) Where the consideration for the payment of the premium is apportion-able, and there is a total failure of any appropriate part of the consideration a proportionate part of the premium is, under the like conditions. there upon returnable to the assured. (03) In particular- (i) Where the Policy is void, or is avoided by the Insurer as from the commencement of the risk, the premium is returnable provided there has been no fraud or illegality on the part of the assured, but if the risk is not apportion-able and has once attached the premium is not returnable. (ii) Where the subject matter insured or part thereof, has never been imperiled the premium or, as the case may be, a proportionate part thereof, of returnable, Provided that where the subject matter has been insured “lost or not lost” and has arrived in safety at the time when the contract is concluded the premium is not returnable unless at such time the Insurer knew of the safe arrival. (iii) Where the assured has no insurable interest throughout the currency of the risk the premium is returnable provided that this rule does not apply to a Policy affected by way of wagering. (iv) Where the assured has a defeasible interest which is terminated during the currency of the risk the premium is not returnable. (v) Where the assured has over-insured under an unvalued Policy a proportionate part of the premium is returnable. (vi) Subject to the foregoing provisions, where the assured has over insured by double Insurance, a proportionate part of several premiums is returnable. Provided that, if the policies are effected at different times, and any earlier Policy has at any time borne the entire risk, or if a claim has been paid on the Policy in respect of the full sum insured thereby, no premium is returnable in respect of that Policy, and when the double Insurance is effected knowingly by the assured no premium is returnable.
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When a risk for which the insurer has accepted a premium fails to attach thee is said to be a failure of consideration and the insured, if he acted in good faith, may recover the premium.

State-run insurance plans that make property insurance available to those who cannot obtain it in the voluntary market. The specifics of each plan vary from state to state, but all plans require licensed property insurers to participate in the pool and share in the profits and losses.

A plan instituted by the federal government, similar to stop loss reinsurance. If a property owner, whether commercial or residential, cannot obtain property insurance, he or she can apply to an insurance agent who works for a FAIR plan insurer. Should the property be found acceptable, he or she will be insured. If not, the company will suggest improvements to the property, and will insure it after the improvements are made.

Fair plans are property insurance pools that sell to people who cannot buy coverage in the voluntary market because of high risks such as hurricanes. FAIR plans, which exist in 28 states and the District of Columbia, insure against losses from fire, vandalism, riot, and windstorm losses. Some sell homeowners insurance that includes liability. Plans vary by state, but all require property insurers licensed in the state to participate in the pool and share in the profit and losses in the same proportion the companies write voluntary business. Often an insured must show that the property has been turned down in the voluntary market.In seven Atlantic and Gulf Coast states there are also “Beach and Windstorm” plans. Residences and businesses in certain areas of these states can purchase coverage against hurricanes and other severe windstorms. Plans differ in each of these states. Beach and Windstorm plans are available in New York, North Carolina, South Carolina, Florida, Alabama, Mississippi, and Texas. (See Assigned Risk; Joint Underwriting Association; Residual Market).