Reinsurance

What Does it Mean?
The practiceof insurers transferring portions of risk portfolios to other parties bysome form of agreement in order to reduce the likelihood of having topay a large obligation resulting from an insurance claim. The intent ofreinsurance is for an insurance company to reduce the risks associatedwith underwritten policies by spreading risks across alternativeinstitutions.

Also known as "insurance for insurers" or"stop-loss insurance"...

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