Funds Withheld Reinsurance Agreement

Definition. Deposit accounting – the type of premium count if the policy or reinsurance contract is not considered insurance. The premium is not counted as income, but as a contribution or contribution to the insurer`s surplus. Losses paid are not expenses, but a return on investment. Although it has been ensured that accurate, up-to-date and relevant information on the subject addressed in this reinsurance glossary has been provided, the proposals, general principles, conclusions and other information presented here are only for educational purposes. This reinsurance glossary understands that it has neither the intention nor the intention to provide the reader with legal, accounting, investment, marketing or other types of professional advice to businesses. If legal advice or other specialized advice is required, the services of a competent professional should be sought. transfer of reinsurance in which the company that transferred the premium is not effectively paid to the reinsurer, but retains the premium on a separate account from which the receivables are paid. The primary objective of structuring reinsurance on the basis of the selected fund is to reduce or eliminate the need for an unauthorized reinsurer to post, reduce or dispose of assets. The remaining funds in the “Withheld Funds” account after the expiry of all subject policies and the transfer of all receivables are paid to the reinsurer.

Reinsurance companies help insurers spread their risk risk. Insurers pay a portion of the premiums they collect to their policyholders to a reinsurance company and, in return, the reinsurance company undertakes to cover losses beyond certain high limits. Do you know what the role of reinsurance is in life insurance? Reinsurance plays an important role because it performs the following functions: it provides capacity, creates stability, contributes to the consolidation of financial capacity. In life insurance, reinsurance contracts have provisions that match the insurer`s long-term coverage needs. This text or part of this text cannot be reproduced or transferred, in any form or by any means, electronically or mechanically, including photocopies, recordings, recordings, recordings in an information consultation system or by any other means, without the publisher`s prior written permission.