Aggregate sums insured

The total of all a cedant’s property sums in a reporting zone, such as ARPC’s tiers.

Calendar year

Refers to 1 January to 31 December of a particular year.

Capacity

The ability of an insurer, reinsurer, syndicate or market to absorb risk.

Captive insurer

An insurance company that is wholly owned by one or more entities (parent organisations) and whose main purpose is insuring the parent company’s risks.

Co-reinsurance

A ‘co-reinsurance’ warranty may be imposed on some catastrophe excess of loss and stop loss contracts. The effect is to require the reinsured to retain net and unprotected a specified percentage of a layer such that it maintains an interest in economical loss settlement once the deductible has been exceeded.

Deductible

The loss the reinsured assumes for its own account in non-proportional reinsurance.

Financial year

Refers to 1 July to 30 June of a particular year.

Insurer customer

An insurer that transfers all or part of a risk to a ceding reinsurer.

Reinsurance

Reinsurance is insurance that is purchased by an insurance company from one or other insurance companies (the reinsurer) directly or through a broker as a means of risk management.

Retention

The amount retained by a reinsured after placing reinsurance.

Retrocession

Reinsurance purchased by reinsurance companies as a means of risk management.

Retrocessionaire

A reinsurer that accepts retrocession business, reinsuring reinsurers.

Triennial review

A review which examines the need for the TI Act to continue to operate and occurs every three years.