What is the difference between risk attaching and loss occurring?

In risk-attaching reinsurance, the reinsurer agrees to cover the claims that are established during the agreed period. The date of occurrence of the loss is not considered. Loss-occurring coverage, on the other hand, provides coverage to the insurance company for all losses that occur during a particular period.

What is risk attaching basis in reinsurance?

“Risk attaching” treaty means that the Reinsurer only pays the Ceding party for losses resulting from policies that are issued (new or renewed) or in force with the reinsurance contract period, regardless of the date of occurrence of the losses.

What is loss occurring basis?

Losses occurring basis A Reinsurance treaty under which all claims occurring during the period of the contract, irrespective of when the underlying policies incepted, are covered. Any losses occurring after the contract expiration date are not covered. As opposed to claims-made or risks attaching contracts.

What is quota share?

A quota share treaty is a pro-rata reinsurance contract in which the insurer and reinsurer share premiums and losses according to a fixed percentage. Quota share reinsurance allows an insurer to retain some risk and premium while sharing the rest with an insurer up to a predetermined maximum coverage.

What is the difference between reinsurance and insurance?

Insurance is purchased to provide protection from covered losses; reinsurance guards the insurance company from too many losses. They both contractually transfer the cost of the loss to the company issuing the policy.

What is the difference between a claims made and occurrence?

An occurrence policy has lifetime coverage for the incidents that occur during its policy period, regardless of when the claim is reported. A claims-made policy only covers incidents that happen and are reported within the policy’s time frame, unless a ‘tail’ extension is purchased.

What does the occurrence basis cover in liability insurance?

An occurrence basis policy is one that covers the insured for liability related to events that occurred during the policy period, even if the claim itself is only filed after the policy period has expired.

What type of risk is insurable?

Insurable risks are risks that insurance companies will cover. These include a wide range of losses, including those from fire, theft, or lawsuits. When you buy commercial insurance, you pay premiums to your insurance company. In return, the company agrees to pay you in the event you suffer a covered loss.

When reinsurance is arranged for collection of risks?

Facultative reinsurance is reinsurance purchased by an insurer for a single risk or a defined package of risks. Usually a one-off transaction, it occurs whenever the reinsurance company insists on performing its own underwriting for some or all the policies to be reinsured.