A reinsurance treaty under which the original insurer binds himself to cede, and the reinsurer binds himself to accept, the risks specified.

Reinsurance of a fixed amount, whether whole or part of the insurer’s line.

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.

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.

The Financial Sector Assessment Program of the International Monetary Fund is a comprehensive assessment of a country’s financial sector. This includes a financial stability assessment and, in developing and emerging markets, a financial development assessment. In jurisdictions with financial sectors deemed by the IMF to be systemically important, financial stability assessments under the FSAP are a mandatory part of surveillance under the IMF’s Articles of Agreement, and are supposed to take place every five years; for all other jurisdictions, participation in the program is voluntary. In developing and emerging market countries, FSAPs are conducted jointly with the World Bank.

The Financial Stability Board was established by the G-20 countries to coordinate the work of national financial authorities and international standard setting bodies at the international level and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability.

The Financial Stability Oversight Council, established under the Dodd-Frank Act, provides comprehensive monitoring of the stability of the United States’ financial system. The Council is charged with identifying risks to the financial stability of the United States; promoting market discipline; and responding to emerging risks to the stability of the United States’ financial system. The Council consists of 10 voting members and 5 nonvoting members and brings together the expertise of federal financial regulators, state regulators, and an independent insurance expert appointed by the President. The independent insurance expert is a voting member, appointed by the President and confirmed by the Senate for a six-year term. The Director of FIO and a state insurance commissioner selected by the state insurance commissioners (through the NAIC) serve as non-voting members.

Financial System Stability Assessment, a written document prepared at the conclusion of each country’s FSAP by the International Monetary Fund.

Indicates that the Reinsurance covers the whole of the line signed on the original Insurance.

Indicates that a Reinsurance order is for the full line written on the slip covering the original Insurance; effectively this is the same as G.S.L., because the written line will be transposed to a signed line when the original risk is closed.
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See: “Reinsurance, Full Written Line.”