Cover for a loss that has already occurred, e.g. a major fire, but for which the severity of the loss is uncertain. The insured pays a high premium to substitute certainty for the uncertain outcome. The insurer is attracted by the investment potential of a high premium pending settlement of the claims.

a reinsurer who cedes business.
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A reinsurer that is reinsured under a retrocession.

The transaction when a reinsurer (the retrocedant) reinsures parts of his risks (the retrocession) with another reinsurer (the retrocessionaire).

Liability policy extension bringing within a losses-occurring policy on a claims-made basis bodily injury or damage caused prior to the inception of the policy but for which no previous policy can be traced. ‘Retro’ cover closes gaps in the insured’s insurance history but does not respond to shortfalls in cover in traced insurances. ‘Retro’ cover should embrace the insured’s previous activities as the current business description may not apply.

Finite risk cover for IBNR losses under which the reinsured pays a premium for the (partial) assumption of losses that exceed the accumulated reserves. Contracts may be structured as: stop loss treaties, working excess of loss treaties or catastrophe excess of loss basis.

Scheme benefits are based on revalued earnings, i.e. index-linked earnings for a given period. The state second pension is a revalued earnings scheme.

IR imposed maxima on benefits and contributions when calculating maximum benefits in approved occupational schemes. Limits vary according to Class A, B and C membership.

Written undertaking by scheme administrator promising to notify IR in the event of certain circumstances or before taking specified actions, e.g. undertaking that benefits will not exceed IR maximum approvable limits.