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The dictionary of terms of insurance
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A contingency that may occur, but not necessarily, and is outside control; an object of insurance; a type of the insurer’s liability.


An insurer who underwrites risks or assigns it in part to another insurer (reinsurer).


An insurer underwriting reinsurance risks.


A system of economic relations in secondary insurance where the insurer (the assignor) underwrites risks and assigns a portion of liability for such risks (based on its financial possibilities) on agreed terms to other insurers. This is done to ensure financial stability and profitability of insurance operations.

Reinsurance contract

A legal instrument which sets out the relations of the parties (reinsurer and reinsurant) and provides their rights and responsibilities. It is a fundamental document in any court proceedings or arbitration in the event of disputes arising between the reinsurant and the insurer.

Risk premium

In insurance, the premium is usually divided in two portions. The bulk of the premium is designated to create the fund necessary for the payment of claimed losses and it covers the risks underwritten by the insurance company and is referred to as the risk premium. The markup over the risk premium is used to create reserves for extraordinary losses and to cover business costs.