To be agreed or to be advised.

To be entered

The period covered by a treaty reinsurance contract.

The period of time allowed to a broker for the payment of premium to the underwriter.

The territorial area of the business covered by the reinsurance. It is usual to place reinsurances covering the US separately because of the specific characteristics of insurance in that markets, so that treaties which are World-wide in scope invariably exclude US business. There is a great difference between a treaty covering business "written in X country" and a treaty covering risks "located in X country".

An EXCESS OF LOSS reinsurance of a SECOND TIER reinsurer. i.e. an excess of loss reinsurance protecting an excess of loss reinsurer of a direct underwriter.

An accounting system, originally adopted at Lloyd's whereby an underwriting year is not closed until the end of the third year following the inception of the underwriting year and all premiums and claims relating to that year are accounted to that year. This was developed in order to give a more accurate position when determining the profit or loss relating to an underwriting year

A method of calculating PROFIT COMMISSIONS which is intended to equalise fluctuations as between one year and another. In Year 1 the profit commission is paid on the whole of the result of that year, in Year 2 the profit commission is paid on the average of the results of Years 1 and 2 and in Year 3 the profit commission is paid on the average result of the three years. Thereafter the oldest Year is dropped from the calculation as the new Year is added.

Total Loss Only

A layer of excess of loss protection that provides coverage at more than one level. The primary purpose is to provide TOP LAYER coverage, however in the event that REINSTATEMENT coverage at lower levels is exhausted the top and drop layer will, if required, "drop" down to give such coverage.

A form of TOP AND DROP coverage whereby the contract only drops to give reinstatement coverage to the layer immediately below.

The highest LAYER of EXCESS OF LOSS COVERAGE purchased by a REINSURED.

A reinsurance agreement made between a REINSURED and one or more REINSURERS whereby the latter accept without option reinsurances within the terms of the contract. Certain types of treaty also require the reinsured to CEDE all risks falling within the scope of the treaty. See also QUOTA SHARE TREATY, SURPLUS TREATY, FACULTATIVE OBLIGATORY TREATY, EXCESS OF LOSS TREATY, STOP LOSS TREATY.

The formal document, usually produced in duplicate and signed by both parties, which sets out the terms and conditions of the TREATY agreement between REINSURED and REINSURER.

A method of presenting the treaty statistics showing the data for each year at (usually) twelve monthly intervals from inception. As the oldest year shows the longest stretch of data with each year thereafter being shorter by twelve months the appearance of the table is triangular. The purpose of this method of presentation is to show loss development (and, to a lesser extent, the premium development) by year.