A basis for a reinsurance treaty whereby the test of the reinsurer’s liability is when the original insurance was effected rather than whether the loss occurred or was notified during the reinsurance period.
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UK: A reinsurance treaty written on the basis that the reinsurer’s liability is based on when the underlying policy was effected and not whether the loss occurred or was notified.

Used in proportional reinsurance. The outstanding claims that, together with the portfolio premiums, make up the reinsurance premium required for a portfolio transfer; usually used to transfer obligations from one year of accident to the next.
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See: “Reinsurance, Portfolio Claims.”

Part of the mechanics of instituting a reinsurance treaty. It may be arranged on varying basis, such as new and renewal business or business in force, any and all of which are referred to as the portfolio entry.

The unearned premium that together with the portfolio claims make up the reinsurance premium required for a portfolio transfer.

REINSURANCE: A type of reinsurance which refers to all the risks of the reinsurance transaction. For example, if one company reinsurers all of another’s outstanding Automobile business, the reinsuring company is said to assume the, “portfolio” of Automobile business and it is paid the total of the unearned premium on all the risks so reinsured (less some agree commission).
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In transactions of reinsurance, it refers to all the risks of the reinsurance transaction. For example, if one company reinsures all of another’s outstanding automobile business, the reinsuring company is said to assume the portfolio of automobile business and it is paid the total of the unearned premium on all the risks so reinsured (less some agreed commission).
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UK: The transfer by cession of an entire portfolio of policies from a cedant to a reinsurer. It may be prompted by the cedant wishing to exit a particular line of business. Alternatively the reinsurer assumes a percentage of the entire portfolio of the cedant’s business in a selected line or all lines of business.
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REINSURANCE: The transfer of portfolio via a cession of reinsurance; the reinsurance of a runoff. Only policies in force (or losses outstanding) are reinsured, and no new or renewal business is included. Premium or loss portfolios, or both, may be reinsured. The term is sometimes applied to the reinsurance by one insurer of all business in force of another insurer retiring from an agency from a territory or from the insurance business entirely.

The reinsurance of an entire portfolio at a premium relating to the estimated outstanding claims and unearned premium under that portfolio. Usually used by a reinsurer wanting to close a treaty year and pass on the liability to the following year for administrative reasons.
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UK: The transfer of general or life insurance business, usually involving many individual policies, from one insurer to another. Transfer applications must be approved by the court (FSMA, s. 107). The FSA monitors the progress of the application to ensure that policyholders (of both transferor and transferee) are treated fairly and remain secure. An FSA appointed independent expert reports on the impact on both sets of policyholders.

When the terms of a policy provide that the final earned premium be determined at some time after the policy itself has been written companies may require tentative or “deposit” premiums at the beginning which are readjusted when the actual earned charge has been later determined.
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When the price of insurance is tied to fluctuating values or costs that cannot be known until the end of the policy period, inventory or payroll are two common examples, a deposit or provisional premium or estimated premium may be charged at the outset of a policy with final adjustment to come at the end of the term.

The amount of premium that Lloyd’s Name may write in a given year, determined by the size of the Name’s wealth, deposit and whether or not incorporated.

The portion of the premium calculated to enable the insurer to pay losses and in some cases, allocated claim expenses or the premium arrived at by dividing losses by exposure and in which no loading has been added for commission, taxes and expenses.