REINSURANCE: (01) That part of the premium applicable to the expired part of the policy period, including the short-rate premium on cancellation, the entire premium on the amount of loss paid under some contracts, and the entire premium on the contract on the expiration of the policy. (02) That portion of the reinsurance premium calculated on a monthly, quarterly or annual basis which is to be retained by the reinsurer should there cession be cancelled. (03) When a premium is paid in advance for a certain time, the company is said to “earn” the premium as the time advances. For example, a policy written for three years and paid for in advance would be one-third “earned” at the end of the first year.
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Insurance companies often require that premiums be paid in advance for the full policy term. However, the premium is “earned” at an even rate for the term of the policy and that portion that is “unearned” remains in a reserve in case the insured cancels the policy and is entitled to some of the money in return.For example, suppose the premium for Susie’s homeowners policy is $ 1,200 per year and she pays it on the effective date of the policy. On that date, the entire $1,200 is unearned and goes into the unearned premium reserve. The policy “earns” $100 per month and that amount is transferred from the unearned premium reserve to the company’s general account (although some is placed in the loss reserves). If Susie decides to cancel at 6 months, there is $600 in the reserve fund to send her a refund of the unearned premium. This example is a very simplistic, but is a basic outline of the process. (See Reserves; Unearned Premium).
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Portion of a premium for which protection has already been provided by the insurer.
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Premium for which protection has been provided. When a premium is paid in advance for a policy period, the company “earns” a portion of that premium only as time elapses during that period.
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UK: that part of an insurance premium receivable which is attributable to the period of cover which has already gone by.
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US: That portion of a policy’s premium that applies to the expired portion of the policy. Although insurance premiums are often paid in advance, insurers typically “earn” the premium at an even rate throughout the policy term. The unearned portion of the premium that has been paid is kept in the “unearned premium reserve.”
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The portion of a premium exhausted during the policy’s term.
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UK: The proportion of premium related to the period of insurance that has already run.
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The proportion of premium that relates to a used period of cover.

A reinsurance term that refers to either 1) that part of the reinsurance premium applicable to the expired portion of the policies reinsured, or 2) that portion of the reinsurance premium which is deemed earned under the reinsurance contract.

The European Insurance and Occupational Pensions Authority is part of the European System of Financial Supervision consisting of three European Supervisory Authorities and the European Systemic Risk Board. It is an independent advisory body to the European Parliament, the Council of the European Union and the European Commission.

A clause in some reinsurance agreements providing that the reinsurance agreement constitutes the entire agreement between the parties with respect to its subject matter, superseding all previous contracts, written or oral; and that any prior statements, negotiations or representations between the parties are merged into the final, written agreement. The clause may also provide that any modifications or changes in the agreement must be in writing, and executed by both parties.

A provision in reinsurance agreement which is intended to neutralize any change in liability or benefits as a result of an inadvertent error by either party.

A provision in a reinsurance agreement which reserves to the reinsurer every right under the reinsurance agreement not previously waived, and to the ceding company every right which had not been forfeited.

A term in a Letter of Credit providing for automatic renewal of the credit for an indefinite number of periods until the issuing bank informs its beneficiary of its final expiration.

A reinsurance broker who places a surplus line.
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A broker who has a license to deal with insurers not admitted in his or her state.

Excess of loss ratio reinsurance where the excess point is recalculated annually as a moving average of the loss ratio experienced over an agreed number of preceding years and the ceding company is required to bear an agreed share of any loss in excess of that average.

The marine insurance equivalent of surplus reinsurance.