The Ceding office retains the bottom layer of risk itself and the Reinsurer only have to pay claims above this level. For example, if the cedant had retained Rs. 1,00,000 of a Rs. 10,00,000 risk, the cedant would bear the first Rs. 1,00,000 of each and every loss and the Reinsurers would pay only that part of any claim in excess of Rs. 1,00,000.
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An arrangement whereby two or more Insurers each provide a rupee amount of Insurance coverage, or layer. The Insurer of the first layer is primary, thus responding first in covering a loss above any retention by the insured. Insurers of subsequent layers respond in sequence, as necessary, to cover any large loss. Layers are used in both property and liability Insurance. Also, See Also: “Layering, Reinsurance.”

The reinsurer who negotiates the terms, conditions and premium rates and first signs on to the slip. Reinsurers who subsequently sign on the slip under those terms and conditions are considered following reinsurers.

(i) Particular type of Insurance, such as the liability “line.” (ii) All types of Insurance written for a property owner, such as all lines for ABC Manufacturing. (iii) Amount of Insurance on a given property, such as a Rs. 10,00,000 line on XYZ manufacturing’s building. (iv) Gross line-total amount of Insurance accepted by an insure on individual risk, including the amount Reinsured. (v) Net Line: amount of coverage retained by the Ceding Insurer on an individual risk in a surplus Reinsurance treaty or the maximum amount of loss on a particular risk to which an Insurer will expose itself without Reinsurance.

A schedule included in a reinsurance treaty contract showing the limits of liability to be written by a ceding company for different classes of risk and (usually) also showing the amount of each respective limit (stated as a number of “lines”) which can be ceded to proportional reinsurance treaties.

Insurance and reinsurance business carried out on a face-to-face basis in the city of London.

Outwards excess of loss reinsurance in the London Market.

A term used to describe certain type of third party liability exposures (e.g., malpractice, products, error and omissions) where the incidence of loss and the determination of damage are frequently subject to delays which extend beyond the term the insurance or reinsurance was in force. An example would be contamination of a food product which occurs when the material is packed but which is not discovered until the product is consumed months or years later.

All expenditure of an insurer associated with its adjustment, recording and settlement of claims, other than claim payment itself. The term encompasses both allocated loss adjustment expenses (ALAE) which are loss adjustment expenses identified by a claim file in the insurer’s records, such as attorney’s fees and unallocated loss adjustment expenses (ULAE) which are operating expenses not identified by claim file, but functionally associated with settling losses, such as salaries of claims department.
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The total expenses associated with adjusting a claim. The actual amount of the loss is not included in this amount.