The listing of layers of underlying layers in a reinsurance programme that would respond to losses before the subject contract.

A reinsurance of an Excess of Loss reinsurer of direct insurers. See also FIRST TIER REINSURANCE and THIRD TIER REINSURANCE.

The insurer(s) or reinsurer(s) with whom a risk has been placed.

A clause that allows for amounts due between REINSURER and REINSURED to be set off against each other and the balance settled net. Can be extended to cover balances due under all contracts between the parties. Does not cover brokers' balances.

see INDEX CLAUSE.

Those types of insurance (such as fire, personal accident, etc.) where it is expected that losses will be notified and settled quickly, either within the period of cover or shortly thereafter. See LONG TAIL.

The amount of REINSTATEMENT coverage provided by a reinsurance programme.

The underwriter's participation in a risk after the lines have been reduced, as necessary, to total 100% of the actual amount at risk. See Written Line

The percentage that the SIGNED LINE bears to the WRITTEN LINE. The broker would be aware of the possibilities of overplacing a risk and would be able to mention an estimate of the signing when placing the contract. The reinsurer could then take this into consideration when judging the line to be written.

The slip used by the broker in the procedure for signing and accounting through the BUREAUX. This may be the original slip or it may be a copy taken from the original slip that has been approved by the LEADING UNDERWRITER.

A piece of business that has consistently shown poor results (and is considered to have little potential for future profit)

Pro forma questionnaires, which were first used by Charles Skey, a leading non-marine underwriter at Lloyd's, to give a good overview of the reinsured's account. These were gradually adopted by Lloyd's and LMX market leaders to be the minimum amount of information needed to consider a reinsurance submission.

CATASTROPHE reinsurances either for a high layer beyond the known levels of exposure or in excess of an accumulation beyond predicted amounts, but intended to give an extra degree of security against an untoward experience.

A scale of commission payable under a treaty where the amount of commission varies inversely with the treaty LOSS RATIO subject to a maximum and minimum.

The document used by the broker for negotiating a placing in a SUBSCRIPTION MARKET. The underwriter signifies his acceptance on the broker's slip.

A SIGNING SLIP that has been adapted to serve as a policy in place of a formal policy document.

A specific agreement by a treaty reinsurer to accept a risk that would not be normally included within the scope of a reinsurance contract.

See RECORDS CLAUSE.

Layers of EXCESS OF LOSS coverage that respond to losses arising on specific sections of the account (property, marine, aviation etc.). See also GENERAL LAYERS.

See SPECIFIC PROTECTIONS

See INDEX CLAUSE

The total amount of premium that a SYNDICATE is authorised to underwrite in a particular year.

The statistical record showing the premiums and claims relating to an insurance or a reinsurance contract.

A form of excess of loss reinsurance. Operates on the basis of aggregate losses. Thus a typical cover will pay the reinsured's aggregate losses in excess of a specified LOSS RATIO. The cover provided may be subject to a measure of CO-REINSURANCE. Often used for certain types of business not amenable to usual methods of reinsurance, such as Hail, and as an ultimate protection to the reinsured's net retained account in many other classes. Formerly also known as Excess of Loss Ratio reinsurance. Under AGGREGATE EXCESS OF LOSS reinsurance the deductible and the reinsurer's limit of liability are expressed in terms of monetary amounts rather than Loss Ratios.

Writing a line on an insurance or a reinsurance contract.

The amount an underwriter accepts as its liability under an insurance or a reinsurance contract.

A market, such as Lloyd's, where Underwriters accept shares of an insurance (or reinsurance) coverage on a co-insurance (or co-reinsurance) basis in contrast to markets where a single insurance carrier will accept the whole of the offer. Whilst subscription markets maximise capacity they tend to suffer a costs disadvantage in that it is often necessary to approach many insurers (or reinsurers) to complete the placing of a coverage.

A provision allowing the treaty to be cancelled immediately, without notice, in the event of the happening of certain events, such as war between the countries of the parties or the insolvency of one of them.

A form of PROPORTIONAL reinsurance treaty whereby the REINSURED CEDES and the REINSURER accepts that share of the risk which exceeds the reinsured's retention (see LINE (2)). The agreed treaty limit will usually be expressed as a multiple of that retention. A reinsured may place several surplus treaties (First Surplus, Second Surplus etc.)

See SYNDICATE REINSURANCE

A group of Lloyd's underwriting members who jointly offer their security for risks accepted on their behalf by an active underwriter appointed to represent them at Lloyd's by an underwriting agency. Each name in the syndicate has an individual liability and is not responsible for the liabilities of his/her fellow members.

A reinsurance effected on behalf of a Lloyd's syndicate.

A table shown in a treaty wording setting out the retention and limit for each category of risk.