The ratio of the total premiums receivable by a reinsurer under a surplus treaty to the reinsurer’s maximum liability for any one claim, based on EML.

The total business of an insurer that has been so arranged by selection and reinsurance as to safeguard the financial equilibrium of the Company.
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UK: Insurers may seek to arrange their insurance and reinsurance so that their total business constitutes a well-balanced range of risks and so do not become unduly committed in a limited number of areas, activities or types of risk. The aim is to spread the exposure by a controlled underwriting approach.
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Refer: “Reinsurance, Balanced Portfolio.”

The ceding company’s premiums (written or earned) representing the original exposure forming the basis for the reinsurance and to which the reinsurance premium rate is applied to produce the reinsurance premium. This term is usually defined in the reinsurance contract.

The BCR is a simplified factor-based capital requirement intended for insurers designated as systemic (GSIIs) and is intended to be the basis on which additional capital requirements, a.k.a. Higher Loss Absorbency (HLA) are applied to GSIIs.

A methodology that determines which original policy losses will be covered under a given reinsurance agreement. There are two types of methodologies: policies attaching and losses occurring. The determination may be based on 1) the effective or renewal date of the original policy; or 2) on the date of the loss; or 3) on the date when the reinsured company recorded premium or loss transaction.-Underwriting Year (See also Policies Attaching)The effective date of the original policy, rather than the date of loss, determines the basis of attachment. Any losses occurring on policies written or renewed with inception or renewal dates during the term of the given reinsurance agreement will be covered by that reinsurance agreement irrespective of when the loss actually occurred. This mechanism is often used with “the policies attaching” methodology.
-Accident Year (See also Losses Occurring During)
The date of the loss under the original policy, rather than the effective date of the original policy, that determines the basis of attachment. Any losses occurring during the reinsurance agreement period on policies in force (if any), written or renewed will be covered by that reinsurance agreement irrespective of the inception or the renewal date of the original policy. This mechanism is often used with “the losses occurring during” the contract period methodology.

-Calendar Year Experience
The evaluation of loss experience whereby the total value of all losses incurred during a given twelve-month period (regardless of the dates of loss or the inception date of the policy) is matched with the premiums earned for the same period. As the name implies, Calendar Year Experience is usually calculated for a twelve-month period beginning January 1st. See also Accident Year Experience and Policy Year Experience.

REINSURANCE: A Reinsurance treaty where Insurers are not given details of individual risks ceded to them.
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Refer: “Reinsurance, Blind Treaty.”
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UK: Reinsurance treaty under which the cedant, instead of notifying individual risks routinely, supplies periodical summaries of premiums and claims. The reinsurer rarely exercises his right to examine the cedant’s books in relation to any risk or claim.

A method used for calculating the premium in an excess of loss Reinsurance contract.
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Refer: “Reinsurance, Block Rating.”

A tabular statement of risk, premiums and/or losses supplied by a Ceding office to a Reinsurer under the contract.

A group of treaty arrangements offered by a Ceding Company as a package deal to reinsures. The Reinsurer is required to take an equal share in all the treaties (across the board), which may mean Writing some business which is normally not accepted, unbalanced or unattractive individually.
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Refer: “Reinsurance, Bouquet Of Treaties.”

The collective reference to those reinsurance companies that accept business mainly from reinsurance intermediaries or brokers. See Direct Writing Reinsurer.