Run off basis means that the liability of the reinsurer under policies, which became effective under the treaty prior to the cancellation date of such treaty, shall continue until the expiration date of each policy; (b) Cut off basis : Cut off basis means that the liability of the reinsurance under policies which became effective under the treaty prior to the cancellation date of such treaty, shall cease with respect to losses resulting from accidents taking place on and after said cancellation date. Usually the reinsurer will return to the company the unearned premium portfolio, unless the treaty is written on an earned premium basis.

A provision found chiefly in Marine Hull reinsurance that no return of premium will be allowed except where the policy is cancelled.

REINSURANCE: (i) Largest amount of Insurance or Reinsurance available from an Insurer or group of Insurers. In a broader sense, the largest amount of Insurance or Reinsurance available in the market. (ii) Maximum amount of Insurance that a Company will write on a single risk.(iii) The percentage of surplus or the rupee amount of exposure that an insurer or reinsurer is willing to place at risk. Capacity may apply to a single risk, a program, a line of business, or an entire book of business.
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MEDICAL,USA: 1. Maximum amount of insurance an insurer or reinsurer is capable of underwriting for either one individual (single risk) or for all of its business. 2. Ability of a health care facility to provide necessary medical services.
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UK: Amount of insurance or reinsurance that can be underwritten by an entity or a market. The maximum amount of business that may be accepted by a Lloyd’s member is equivalent to his overall premium income limit. See CAPACITY BOOSTING; CAPACITY TRANSFER MARKET.
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Capacity refers to the amount of capital an insurance company or the insurance industry as a whole has to write coverage. Property and casualty insurance companies are required by state regulators to maintain certain levels of capital and policyholder surplus to underwrite risks. The combination of capital and surplus is known as capacity.When capacity declines, the cost of insurance tends to rise as insurers attempt to make up for losses. Capacity can decline due to extraordinary losses like Hurricane Katrina or reductions in investment income. Capacity can be increased through higher premiums, increased investment return, or increases in reinsurance.Thus, capacity determines the amount of insurance available. Large losses in one area (e.g., medical malpractice) can affect the capacity, and therefore availability, of that type of insurance without affecting other lines of coverage. Capacity is often seen as a test of an insurance company’s financial strength.
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The amount of premium income that insurer is permitted to write or the maximum exposure that could be accepted. It could refer to an insurance company, a reinsurance company, a Lloyd’s Name, A Lloyd’s syndicate, or a whole market. Also Refer: “Reinsurance, Capacity”
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REINSURANCE: The largest amount of insurance or reinsurance available from a company or the market in general. Also refers to the maximum amount of business (premium volume) that a company or the total market could write based on financial strength or regulatory limitations.
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US: The largest amount of insurance or reinsurance available from a company or the market in general. Capacity is determined by financial strength and is also used to refer to the additional amount of business (premium volume) that a company or the total market could write based on excess (unused) capital—that is, surplus capacity.
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The largest quantity of insurance or reinsurance available for purchase, either from one company or from the entire market.
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This term may refer to: (a) a member’s allocated capacity (b) syndicate allocated capacity (c) the total underwriting capacity of all syndicates combined; or (d) the underwriting capacity of an insurance company or reinsurance company.

(01) The working cover subject to a prospective rating plan. (02) A form of excess reinsurance wherein each year’s premium rate is determined by the amount of the ceding insurer’s excess losses for a specified number of preceding years. A form of experience rating. See Also: “Spread Loss Reinsurance.”
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Refer: “Reinsurance, Spread Loss”

It is a provision common in proportional contracts which facilitate a reinsured to make a claim and receive immediate settlement for a large loss outside of the usual periodic accounting and settlement procedure.
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See: Cash Call.

Which protect a Company against very large losses caused by events like conflagrations, cyclone, floods etc. The distinction between a ‘per event’ cover and a ‘per risk’ cover is that in the former, the loss may cover one or more than one risk, but when it affects more than one risk, it should have arisen from one event. See Also: “Per risk or working cover.”

REINSURANCE: A form of excess of loss reinsurance which, subject to a specific limit, indemnifies the ceding company in excess of a specified retention with respect to an accumulation of losses to multiple insureds and/or policies resulting from an occurrence or series of occurrences arising from one or more disasters
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A form of reinsurance that indemnifies the ceding company for the accumulation of losses in excess of a stipulated sum arising from a single catastrophic event or series of events.
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UK: An excess of loss reinsurance which, subject to a specified limit, indemnifies the reinsured for the amount of loss in excess of a specified retention, the excess point, with regard to an accumulation of losses caused by a catastrophic event (e.g. a hurricane) or series of events. The reinsurance document is referred to as a catastrophe cover. See HOURS CLAUSE.

The issuer of an insurance contract that contractually obtains an indemnification for all or a designated portion of the risk from one or more reinsurers.

REINSURANCE: An amount deducted from the reinsurance premium to compensate a ceding company for its acquisition and other overhead costs, including premium taxes. It may also include a profit factor and is called a ceding allowance. See Overriding Commission and Sliding Scale Commission.
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REINSURANCE: The cedant’s acquisition costs and overhead expenses, taxes, licenses and fees, plus a fee representing a share of expected profits – sometimes expressed as a percentage of the gross reinsurance premium.
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The cedant’s acquisition costs and overhead expenses, taxes, licenses and fees, plus a fee representing a share of expected profits, which often is expressed as a percentage of the gross reinsurance premium.
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UK: The reinsurer’s payment to the reinsured as a reimbursement of all or part of the reinsured’s expenses on the original business, plus a contribution to overheads.

REINSURANCE: (i) Insurance Company that places Reinsurance business of its original risk with a Reinsuring Company. (ii) An Insurer who purchases and is entitled to indemnification under a contract of Reinsurance (also known as the Reinsured).
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MEDICAL,USA: Insurance company that places reinsurance business of its original risk, all or part of those risks that it does not wish to retain in full, with a reinsuring company. Insurer that sells its policies directly to the public either through its own salaried employees or exclusive agents. Also called ceding insurer or referred to as cedent.
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Refer: “Reinsurance, Ceding Company”
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REINSURANCE: The company that transfers its risk to a reinsurer. See Cedent, Reassured, Reinsured.