A clause in liability excess of loss Reinsurance tying treaty limits to an appropriate price or earnings index.

A provision, typically in an excess of loss reinsurance contract, whereby the ceding company agrees to share the excess reinsurer’s (leveraged) inflation risk. It typically involves a publically recognized measure of inflation (e.g., wage inflation index) that is used as a trigger mechanism to adjust the excess of loss retention thus allowing changes in inflation to be more equitably shared by the cedent and the excess reinsurer. This sharing of inflation risk may be recognized in the price of the excess of loss reinsurance.

As per IRDA’s General Insurance-Reinsurance Regulations, 2000 “Indian re-insurer” means an insurer which has been granted a certificate of registration under sub-section (2A) of Section 3 by the Authority to carry on exclusively the re-insurance business in India and is approved in this behalf by the Central Government.