Coverage Articles
This clause identifies the classes of business, risks, or policies that may be ceded to the reinsurance contract.
Business covered / Class of Business
This section identifies losses, risks, activities, or exposures that are not covered under the agreement.
Exclusions
These are claims handling expenses that cannot be directly assigned to a specific claim file.
Unallocated Loss Adjustment Expenses (ULAE)
This provision generally states that all cessions are subject to the same terms, conditions, warranties, and limitations as the underlying policies.
Original Conditions
This clause determines which party is responsible for taxes, duties, assessments, or governmental charges arising from the reinsurance agreement.
Taxes/ Federal Excise Tax
These expenses are attributable to a specific claim, such as defence counsel fees, expert reports, or loss adjuster costs.
Allocated Loss Adjustments Expenses (ALAE)
This clause establishes when coverage begins and ends under the reinsurance agreement.
Term / Period
This clause governs the allocation and handling of amounts recovered from third parties after a loss has been paid.
Salvage and Subrogation Clause
The ______ clause is central to excess of loss reinsurance, and describes the loss to which the treaty limits (and deductibles) are applied. In short, the ______ is the sum actually paid by the reinsured in settlement of losses or liability after agreed deductions
Ultimate Net Loss
This clause specifies the countries, regions, or geographic areas where covered risks may be located.
Territorial scope / Territory
The clause is designed to address what happens if a reinsurer is no longer actively writing business, enters run-off, or is placed into liquidation.
Run Off Reinsurer
These are liabilities incurred by an insurer as a result of its conduct in handling a claim rather than from the policy coverage itself.
Extra Contractual Obligations (ECO)
This section explains the meaning of key terms used throughout the contract to avoid ambiguity and disputes.
Definitions / Defined terms
This clause allows a treaty to be terminated before its scheduled expiry if certain predefined events occur.
Special Termination
This term describes damages awarded against an insurer that exceed the underlying policy limit, often due to bad faith or improper claims handling.
Excess of Policy Limits (XPL)