A valuation basis that assumes an insurer will cease to write new business, and continue in operation purely to pay claims for previously written policies. Typically expenses and reinsurance arrangements change after an insurer ceases to write new business.
Insurance Encyclopedia
Run-off broker
A broker that provides the broking support for business in run off. At Lloyd’s, Lloyd’s brokers that undertake to limit their business to acting as a run off broker are given a dispensation from a number of requirements that otherwise apply to Lloyd’s brokers.
Run-off cancellation
A reinsurance provision under which the reinsurer, despite cancellation of the treaty, remains liable under policies still current at the date of cancellation.
Run-off liability
The potential liability of a losses-occurring liability insurer in respect of occurrences that occurred while they were on risk being reported as claims after the expiry of their policy. Contrast with claims-made policy where the run-off risk attaches to the insured who may be faced with a claim after the policy has terminated. See LONG-TAIL.
Run-off licences
Granted by Lloyd’s to certain run-off companies and managing agents to conduct the run-offs of Lloyd’s syndicates. These run-offs arise from open years not closed by reinsurance to close.
Run-Off policy
A claims-made insurance policy that affords coverage for claims made during the policy period only if the claims are for wrongful acts committed prior to the policy period. A run-off policy is most frequently purchased following the acquisition of the insured company. Because the directors and officers of the acquired company may be replaced or removed following the acquisition, those directors and officers typically purchase prior to the acquisition a prepaid, noncancellable multiyear run-off insurance policy that cannot be amended or affected in any way by the acquiring company or subsequent management. That policy covers future claims arising out of conduct by the directors and officers prior to the acquisition.
Run-off syndicate
a Lloyd’s syndicate which has been unable to close in the normal way by paying a reinsurance to close premium.
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A syndicate with one or more run-off years of account.
Running balance
Amount owed on a credit transaction; also known as outstanding or unpaid balance .
Running down clause
Additional coverage that can be added to an ocean marine hull policy to provide protection for damage to another ship caused by collision.
Running Down Clause (Marine)
Whereby the whole and not three quarter of the damages would be payable by the Insurers. This clause does not include an indemnity for liability in respect of death of or bodily injury to third parties, or for damage to harbors or other such structures. Running down clause is that portion of a Marine Policy that protects against damages due to collision with another ship.