(01) Any provision in a Policy designed to cut off the Company’s loss at a given point i.e., a Policy where no payment is made until the accumulated total losses in the year exceed the stop loss level, when the Insurer takes over. (02) A form of excess insurance. For example, in a group health plan, the stop loss coverage may begin benefits when self-funded claim exceed 125 percent of the claims an insurer would have expected under a fully insured contract.
***
MEDICAL, US: 1. An agreement between a managed care company and a reinsurer in which absorption of prepaid patient expenses is limited; or limiting losses on an individual expensive hospital claim or professional services claim. 2. Form of reinsurance by which the managed care program limits the losses of an individual expensive hospital claim. See excess risk .
***
US: A form of reinsurance also known as “aggregate excess of loss reinsurance” under which a reinsurer is liable for all losses, regardless of size, that occur after a specified loss ratio or total dollar amount of losses has been reached.
***
UK: a form of reinsurance under which the reinsurer reimburses the cedant’s losses in any year to the extent by which they exceed a specified loss ratio or amount, subject to some specified limit (see also aggregate excess of loss cover and loss ratio reinsurance).
***
A provision in an insurance policy that cuts off an insurer’s losses at a given point. In effect, a stop loss agreement guarantees the loss ratio of the insurer. In reinsurance, the reinsurer pays some or all of a cedant’s aggregate retained losses in excess of a predetermined dollar amount or in excess of a percentage of premium. See Loss ratio coverage.
***
A term for a clause that stops the insurer’s losses at a particular point.