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A decision by a court in a proceeding, which can be brought by either the insurer or the insured, to determine the rights of the parties. In insurance, for example, a court decision may be sought to determine whether an insurance company has an obligation to defend, indemnify or pay on behalf of its insured policyholder under a policy with regard to a particular loss or losses.
A condition which is said to exist by agreement between the parties even though it may not exist in fact (e.g., "all policy limits greater than $1,000,000 are to be reinsured on a pro rata facultative basis, or be so deemed.") To deem means to treat as if.
As used in reinsurance, any excess of charges over credits at the end of any accounting period (which excess shall be a charge in the computation of the contingent commission for the succeeding period, or in computing various experience-rated reinsurance arrangements).
When the terms of a treaty provide that the ultimate premium is to be determined at some time after the treaty has been written, the reinsurer may require a tentative or a deposit premium at the beginning. The tentative premium is readjusted when the actual earned charge has been determined. See Advance Premium.
A provision in a state's law allowing a third party to cut through the insured or insurer to the insurer or reinsurer.
The gross premium income (written instead of earned) of a primary company, adjusted for additional or return premiums but before deducting any premiums for reinsurance ceded, and not including any premiums for reinsurance assumed.
An insurer conducting business in its domiciliary state from which it received its charter to write insurance, as opposed to a foreign company (which is an insurer conducting business in a state other than its domiciliary state), or an alien company (which is an insurer domiciled outside the U.S. while conducting business within the U.S.).
In reinsurance, a method of structuring the retention and limit of a particular layer of a property catastrophe excess reinsurance program so that, in the event that a loss (or losses) exhausts the reinsurance limit in a stated lower layer, the unexhausted limit of the highest upper layer would drop down to respond to subsequent loss(es) during the same contract period as a replacement for the lower layer. Such a method is often referred to as "top-and-drop" coverage. For example, if the first layer of $10 million xs (excess) $10 million in a program of $140 million xs $10 million were exhausted, the top layer (for this example, $10 million xs $140 million) will drop down and provide $10 million xs $10 million for a negotiated number of additional occurrences. Another use of drop-down coverage may occur within the first catastrophe layer, wherein the loss retention in a contract drops after the first loss and the layer limit then expands. For a different example, if the first layer coverage were $1 million xs $1 million and a loss in excess of $1 million occurred, provision would be made for the retention to drop to a lesser amount, such as $750,000, and for the limit to expand to $1,250,000 for the second and subsequent losses in the same period, but subject to the annual aggregate limit as negotiated.