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Explain what is meant by "stop loss reinsurance."

User Dbrasco
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Answer:

Stop-loss reinsurance is a type of excess of loss reinsurance wherein the reinsurer is liable for the insured's losses incurred over a certain period (usually a year) that exceed a specified dollar amount or percentage of some business measure, such as earned premiums written, up to the policy limit.

Step-by-step explanation:

Stop loss reinsurance is a form of reinsurance under which the reinsurer pays the cedant's losses in any year over a particular percentage of the earned premium. Specific annual stop loss reinsurance limits the primary carrier's liability each year to a specified percentage of total ultimate incurred loss.

User Robert Childan
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