A basis under which reinsurance is provided for claims arising from policies commencing during to the period to which the reinsurance relates.

REINSURANCE: The amount of capital needed to absorb the various risks of operating an insurance business. For example, a higher risk business requires more capital than one with lower risks. The calculation is intended to be unique to each insurer.
***
The assessment of the capital requirement for a general insurer by considering the risk profile of the business written and its operations. The required minimum margins of solvency are determined after considering IRDA requirements in India.
***
The determination of a member’s capital requirement according to the spread of syndicates in which he participates and the nature of business that those syndicates underwrite.

A method utilized by insurance regulatory authorities to determine the minimum amount of capital required of an insurer to support its operations and write coverage. The insurer’s risk profile (i.e., the amount and classes of business it writes) is used to determine its risk based capital requirement.

Excess of loss reinsurance that related to individual losses affecting only one insured risk at any one time.

A phrase used in reinsurance referring to the practice of ceding poorer business to a reinsurer while retaining good risks.

REINSURANCE: A key element of reinsurance, whereby insurance risk is shifted from the reinsured to the reinsurer under a reinsurance agreement. In order for a reinsured to receive statutory and GAAP credit for reinsurance, a threshold of both underwriting risk and timing risk transfer must be achieved. See Risk.
***
UK: One party transfers the financial effects of his loss to another party. In insurance the insured transfers the possibility of loss to the insurer in return for the premium. Other forms of risk transfer can be found in contracts and leases that are used to transfer risk from one party to another to the extent permitted by law (see UNFAIR CONTRACT TERMS ACT 1977). Risk transfer of a different kind occurs where an activity is transferred from one party to another, e.g. the sub-contracting of a hazardous process to another party, but this could also be termed an example risk avoidance.
***
Using funds that originate outside the organization.

A term used to denote the physical units of property at risk or the object of insurance protection and not Perils or Hazard. Reinsurance by tradition permits each insurance company to frame its own rules for defining units of Risks. The word is also defined as chance of loss or uncertainty of loss.