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Fra Fre Frg Fri Fro Fru

Frolic of his own

An act ‘for one’s own purposes. It describes circumstances when an employer is not vicariously liable for the tort of his employee because the latter was not acting in the course of employment as he was ‘on a frolic of his own’, i.e. engaged in an activity on his own account. In Hilton v. Thomas Burton (Rhodes) Ltd (1961) demolition workers left work in the employer’s van to go to a cafe. The driver, an employee of the defendants, was negligent and the foreman was killed. The defendants were not liable as the men were on a ‘frolic of their own’.

From

When a ship is insured ‘from’ the port of departure, the insurance commences when she breaks ground intending to proceed on her voyage.

From the Ground Up

A statement of an original insurer’s experience of a class of business offered for reinsurance is said to be from the ground up when it shows the number and distribution by amount of all claims however small even though reinsurance is required for large claims only. Also, ground up loss distributions are used to evaluate the impact of different levels of deductible on other insurances such as motor. Analyses often entail simulation techniques to evaluate (re)insured loss distributions.

Front company

An insurer that issues a policy and cedes all or a substantial part of the risk to another insurer. Certain types of statutory coverages requiring evidence of insurance from admitted insurers are fronted and reinsured by captives. A “pure front” is one that delegates underwriting and claims handling authority to the reinsurer or a managing general agent (MGA). Most insurers that front for captives are not pure fronts.
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An insurer that issues a policy and cedes all or a substantial part of the risk to another insurer. Certain types of statutory coverages requiring evidence of insurance from admitted insurers are fronted and reinsured by captives. A &#8220pure front&#8221 is one that delegates underwriting and claims handling authority to the reinsurer or a managing general agent (MGA). Most insurers that front for captives are not pure fronts.

Front-end edits

Electronic check of transmitted insurance claims to screen the incoming data or claims before they enter a system for errors, conflicting code entries, and a match of diagnosis to medical service(s) provided. This electronic examination has the capability to accept or reject each transaction or claim based on whether or not it complies with the checks. Also called claim edits and edit check .

Fronting

REINSURANCE “Arrangements by which an insurer, for a specified fee or premium, issues its policies to cover certain risks underwritten or otherwise managed by another insurer or reinsurer. The insurer then transfers all, or substantially all, of the liabilities thereunder to such insurers by means of reinsurance.
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UK: an arrangement whereby one insurer agrees to accept business on behalf of others, or to cede the business to others; such an arrangement may be used in markets where the fronting company is well established and finds it easier to obtain business than the companies for which it agrees to front, or to conceal the identity of the company to which the business is being channelled.”
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“Often the entities an insured does business with want a policy written by a major carrier with an acceptable rating with Best’s or another insurance rating service. If the insured is using a captive, this can present a problem.Many insurance companies will “”front”” for the captive. That is, the policy is written on the company’s paper, but the company reinsures the majority of the risk with the captive.

For example, a commercial developer may want a building contractor to provide liability insurance with an A++ rated insurance company before building a new 10-story office building. If the contractor is covered by a captive, he or she pays a fee to an A++ company who then issues the liability policy. The fee covers, other than just expenses, the risk that the rated company will not be able to collect from the captive in the event of a loss.”
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UK: The issue of a policy by an authorised insurer who cedes 100 per cent (or nearly that amount) to a second insurer or a reinsurer who is not an admitted insurer in the state concerned. The authorised insurer ‘fronts’ the risk for a specified fee or premium.
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The practice, in reinsurance, of the ceding company retaining only a small portion of a risk and ceding the remainder to a reinsurer.

Fronting Company

Insurance which, for a fee or percentage of the premium, agrees to issue an Insurance Policy with the prior knowledge that the Policy will be substantially Reinsured by the insured’s captive or by a Reinsurer selected by the insured. Fronting arrangements are designed to comply with the letter of regulations requiring that certain exposures be commercially insured while, at the same time, permitting the insured to retain, or control the Reinsurance or transfer of that exposure. (2) An arrangement whereby one licensed insurer issues a policy on a risk for an at the request of one or more other unlicensed insurers with the intent of passing the entire risk by way of reinsurance to the other insurer(s). Such an arrangement may be illegal if the purpose is to frustrate regulatory requirements.