An agreement made between the Ceding Company and the Reinsurer under which the former agrees to cede obligatorily a portion of risk up to agreed limit to the Reinsurer, who in turn agrees to accept such cessions.
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UK: Under treaty arrangements the cedant agrees to offer, and the reinsurer agrees to accept, all risks of a defined class. This enables the cedant to grant immediate cover for ‘large’ risks without first seeking the reinsurer’s consent. See QUOTA SHARE; SURPLUS LINE; EXCESS OF LOSS, and compare with FACULTATIVE REINSURANCE.
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UK: a type of reinsurance under which the reinsurer agrees in advance to accept a specified proportion of all risks or losses falling within a category defined in the contract (contrast facultative reinsurance).
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An agreement in which the ceding company agrees in advance to cede certain classes of business or types of insurance to a reinsurance company. The reinsurer agrees to accept all risks or losses that fall within the terms of the agreement. A treaty contains common contract terms along with a specific risk definition, data on limit and retention, and provisions for premium and duration.

The Terrorism Risk Insurance Program was established with the passage of the Terrorism Risk Insurance Act in 2002. The program provides shared public and private compensation for certain insured losses resulting from a certified act of terrorism. TRIP was reauthorized, with modifications, in 2005, 2007 and 2015. The current expiration date of TRIP is December 31, 2020.

An agreement establishing a trust arrangement, which may be utilized as a mechanism by the reinsurer for purposes of securing its obligations to the ceding company to satisfy securitization requirements that might apply to the reinsurer under the terms of a reinsurance agreement. Under the trust arrangement, a legal entity is created by a grantor (usually the reinsurer) for the benefit of a designated beneficiary (usually the ceding company). The trustee (generally a financial institution) holds a fiduciary responsibility to handle the trust’s corpus assets and income for the economic benefit of the beneficiary, in accordance with the terms of the trust. In the event that the reinsurer defaults in its payment obligations to the ceding company under the terms of the reinsurance agreement, the trustee may release funds from the corpus of the trust to satisfy such obligations to the ceding company, in accordance with the terms of the trust. In reinsurance, such an agreement is typically established to permit a licensed ceding company to take credit for non-admitted reinsurance up to the value of the assets in the trust.

A provision in an aviation excess of loss reinsurance which relieves the reinsurer of liability unless two or more aircrafts are involved in the same occurrence.

A provision in a marine excess of loss reinsurance which relieves the reinsurer of liability unless two or more rigs are involved in the same loss occurrence.

A provision in a Marine Hull Excess of loss reinsurance which relieves the reinsurer of liability unless two or more vessels are involved in the same loss occurrence.

A project begun in early 2012 between FIO and U.S. state regulators and the European Commission (EC) and the European Insurance and Occupational Pensions Authority (EIOPA). The stated objective is to increase mutual understanding and enhance cooperation between the E.U. and the U.S. to promote business opportunity, consumer protection, and effective supervision. The project includes a comparison of the E.U. and U.S. regimes on seven topics: (1) professional secrecy/confidentiality; (2) group supervision; (3) solvency and capital requirements; (4) reinsurance and collateral requirements; (5) supervisory reporting; (6) data collection and analysis; and (7) independent third party review and supervisory on-site inspections.

Literally, of the utmost good faith. A defining characterization or quality of some (contractual) relationships of which reinsurance is universally recognized to be. Among other difference from ordinary relationships, the nature of reinsurance transactions is dependent upon a mutual trust and a lively regard for the interests of the other party, even if inimical to one’s own. A breach of utmost good faith, especially in regard to full and voluntary disclosure of the elements of risk of loss, is accepted as grounds for any necessary reformation or redress, including rescission.
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Literally, of the utmost good faith. The basis of all insurance contracts – both parties to the contract are bound to exercise good faith and do so by a full disclosure of all information material to the proposed contract.
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Latin phrase meaning of the fullest confidence’. See UTMOST GOOD FAITH.
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“Utmost good faith.” A provision sometimes found in insurance agreements and considered descriptive of the insurance relationship.