The Insurance Manager provides a variety of essential insurance services to the reinsurance company, including: Providing expertise in the areas of insurance, risk management, and underwriting expertise to the reinsurer Hiring an independent actuary to review risks and exposure and to establish appropriate levels of premiums Developing business plans and [...]
A reinsurance company can be owned by any individual or entity other than the company being insured. Owners may include the owners of the company being insured, an asset protection trust, another corporation, limited liability companies, limited partnerships and other entities.
A reinsurance company needs an insurance license. The license is limited. It allows a reinsurance company to take on risks and premiums from a commercial casualty company pursuant to an insurance ceding agreement. A reinsurance company cannot issue an insurance policy directly to the public.
The cost of reinsurance varies greatly, and it is based upon both industry standards and the negotiating skills among the two companies involved, the insurance (or ceding) company and the reinsurance (or assuming) company. The cost of reinsurance is described as a “Ceding Fee” or “Ceding Allowance”, and consists of [...]
This depends upon the negotiations between the insurance company and the reinsurance company. Even though it might seem like the reinsurance company should take as little risk as possible, this would mean that the reinsurance company would get as little of the associated premiums as possible. If the reinsurance company [...]
Why should I consider forming a reinsurance company rather than a regular captive insurance company?
Creation of a regular captive insurance company is an expensive undertaking. Formation of a captive insurance company involves the work of attorneys, actuaries, underwriters and other professionals. Large non-deductible capital contributions are also required. Furthermore, the captive must satisfy “insurance” requirements, including risk pooling or risk sharing, and must qualify [...]
Reinsurance is the transfer of insurance risk (and associated insurance premiums) from one insurance company to another insurance company. The company that receives (or “assumes”) the insurance risk (and associated reinsurance premiums) is called the “Reinsurance Company” and the company that transfers (or “cedes”) the risk (and associated premium) is [...]
The reinsurance company is reinsuring one or more risks covered by a business casualty policy. The business casualty policy is typically issued in the jurisdiction where the insured business has its primary or home office. The reinsurance company is not a party to that primary insurance contract. The reinsurance company [...]
A reinsurance company is a corporation. The documents typically required to open a corporate account will be necessary for opening an account for the reinsurance company. This would include: Article of Incorporation Certificate of Incorporation Bylaws Organizational Minutes Employer Identification Number (“EIN”) Possibly Stock Transfer Ledger
No. A reinsurance company should not purchase life insurance. Life insurance is not an appropriate investment for the reinsurer. The purchasing of life insurance using assets of the reinsurance company may impede the reinsurance company’s ability to pay claims due to a lack of liquidity.