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RATE
- The per unit cost of insurance.
(See also Premium).
RECIPROCAL EXCHANGE
(INTER INSURANCE EXCHANGE)
- A means of insurance whereby each subscriber appoints
a central underwriter as attorney in fact for the
purpose of sharing insurance costs with others insured
in the same group. Generally a separate account is open
for each subscriber and a credit is shown for the
original premium paid and any other credits. The cost of
all overhead and all losses are proportioned and charged
against all accounts at regular intervals. The profit or
loss of a group is also calculated and credited or
charged proportionately to the individual account. If at
the end of the year, the account still shows a credit
balance, that credit balance can be carried forward into
the following year. If there is a deficit in the
account, the subscriber must pay up.
REIMBURSEMENT
- Payment of an amount of money
related to the amount of the loss to or on behalf of the
insured upon the occurrence of a defined loss.
REINSTATEMENT
- Restoring a lapsed policy back
in force. The reinstatement may be effective after the
cancellation date, creating a lapse of coverage. Some
companies require evidence of insurability and payment
of past due premiums plus interest.
REINSURANCE
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- A contract of indemnity against liability by which
the insurance company procures another insurance to
insure it against loss or liability by reason of the
original insurance.
- Insurance by one insurance company of all or part of
a risk accepted by it with another insurance company
which agrees to reimburse the insurance company for the
portion of the claim reinsured. The insurance company
obtaining the reinsurance is called the "ceding
insurance company;" the insurance company issuing the
reinsurance is called the "reinsurer." A reinsurer may,
in turn, seek reinsurance on some portion of the risk it
has reinsured, a process known as "retrocession."
RENEWAL
- The continuation in full force
and effect of something that is about to expire. With an
insurance policy it is made either by the issuance of a
new policy or renewal receipt or certificate, to take
effect upon the expiration of the old policy.
REPLACEMENT COST
- The cost of replacing property without deduction for
depreciation.
RIDER
- Usually known as an endorsement, a rider is an
amendment to the policy used to add or delete coverage.
RISK
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- A chance of loss.
- A person or thing insured. (Impaired or substandard
risk: An applicant whose physical condition or moral
habits do not meet the standard on which the rate is
based).
RISK MANAGEMENT
- Management of the pure risks to which a company might
be subject. It involves analyzing all exposures to the
possibility of loss and determining how to handle these
exposures through such practices as avoiding the risk,
retaining the risk, reducing the risk, or transferring
the risk, usually by insurance.
ROBBERY
- The felonious taking, either by
force or by fear of force, of the personal property of
another, commonly known as "hold-up." |
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