A reinsurance term providing that the reinsurer will not question payment of any claim for which the insurer is liable under the original insurance.
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See: “Reinsurance, Pay as you may be paid.”

A method of reinsurance rating under which the price is based on how frequently a limits loss might occur over a period of time based on historical or projection indications. Thus, if the indicated or projected loss would occur only once in five years, the price would be set (without regard to expenses and profit margins) to be equal to the limit divided by five and the contract would thus be said to have a “five year payback.” Inverse calculation with Rate on Line.

Reinsurance in which the retention and the cession apply per risk rather than per accident, per event, or on an aggregate basis.

A temporary agreement outlining reinsurance terms and conditions for which coverage has been effected, pending replacement by a formal reinsurance contract. Also known as a binder, confirmation, slip and in some circumstances, cover note. The use of placement slips has been reduced as a result of “contract certainty” and other “full contract at inception” initiatives.

The anticipated maximum property fire loss that could result, given the normal functioning of protective features (firewalls, sprinklers, a responsive fire department, etc.,) as opposed to MFL (Maximum Foreseeable Loss), which would be a similar valuation, but on a worst case basis with respect to the functioning of the protective features. Underwriting decisions would typically be influenced by PML evaluations, and the amount of reinsurance ceded on a risk would normally be predicted on the PML valuation.
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UK: probable maximum loss, see maximum probable loss.

The provision in a reinsurance contract that designates that the losses to which the reinsurance applies are those losses that are covered under those original policies that are issued (as new or renewal policies) during the term of the reinsurance even if the actual date of the original loss happened after the termination of the reinsurance contract. (See also Loss Occurring During.)

A basis for a reinsurance treaty whereby the test of the reinsurer’s liability is when the original insurance was effected rather than whether the loss occurred or was notified during the reinsurance period.
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UK: A reinsurance treaty written on the basis that the reinsurer’s liability is based on when the underlying policy was effected and not whether the loss occurred or was notified.

Used in proportional reinsurance. The outstanding claims that, together with the portfolio premiums, make up the reinsurance premium required for a portfolio transfer; usually used to transfer obligations from one year of accident to the next.
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See: “Reinsurance, Portfolio Claims.”

Part of the mechanics of instituting a reinsurance treaty. It may be arranged on varying basis, such as new and renewal business or business in force, any and all of which are referred to as the portfolio entry.

The unearned premium that together with the portfolio claims make up the reinsurance premium required for a portfolio transfer.