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PARIS RE is a global provider of reinsurance solutions through its operating subsidiaries located in Switzerland, France, the United States, Singapore, Canada and Bermuda. The company operates in all lines of facultative and treaty reinsurance covering property, casualty, marine, aviation & space, credit & surety, life, accident & health as well as a wide range of other risks. At its formation, PARIS RE acquired essentially all of the active business of AXA RE. Based on consolidated financial figures at 31 December 2007, PARIS RE shareholders’ equity amounted to 2.474 billion US dollars. On a 12-month pro forma basis, PARIS RE wrote 1.411 billion US dollars in gross premiums in 2007.

 
 

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Glossary

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JURISDICTION CLAUSE [UK]

A provision found in many reinsurance contracts whereby the parties agree to submit their disputes using the law of an agreed state or forum to a non-judicial tribunal of their own choosing rather than a court of law; generally subject to selection criteria and procedures set out in the clause, which produces an opinion or a decision ultimately enforceable by a court of law. Also ARBITRATION CLAUSE and CHOICE OF LAW CLAUSE.


LAYER

A division or level of an excess of loss insurance or reinsurance program. Each layer of the program operates consecutively and each may be underwritten by different insurers or REINSURERs.


LEAD REINSURER [USA]

The REINSURER on a contract recognized as having the major role in negotiating the reinsurance coverage terms of that contract. Compare FOLLOWING REINSURER.


LETTER OF CREDIT - LOC [USA]

Within the context of REINSURANCE, a banking instrument established on a "standby" basis to secure recoverables from NON-ADMITTED REINSURERs to enable the CEDING COMPANY to reduce the provision for unauthorized reinsurance in its STATUTORY ANNUAL STATEMENT. Compare EVERGREEN CLAUSE.


LIMIT OF LIABILITY

The maximum amounts of interest insured. The word term can be used to describe a CEDENT's RETENTION, a cedent's gross capacity, or the maximum amount which may be reinsured under a reinsurance contract. Also LIMIT.


LIMITED RISK REINSURANCE [USA]

A term used to describe a broad spectrum of treaty reinsurance arrangements which provide reinsurance coverage at lower margins than traditional reinsurance, in return for a lower probability of loss to the REINSURER. This reinsurance is often multi-year and financially oriented, and can provide a means of financial management beyond that usually provided by traditional reinsurance. Also FINITE RISK REINSURANCE, NON-TRADITIONAL REINSURANCE, FINANCIAL REINSURANCE. Compare ALTERNATIVE RISK TRANSFER.


LIMIT [UK]

The maximum amounts of interest insured. The word term can be used to describe a CEDENT's RETENTION, a cedent's gross capacity, or the maximum amount which may be reinsured under a reinsurance contract. Also LIMIT OF LIABILITY.


LINE

1) In treaty reinsurance, a CEDENT's RETENTION. 2) In SURPLUS REINSURANCE, the divisions of a treaty that, as a whole, describe the capacity of that treaty. 3) A line of business 4) An underwriter's interest in a risk.


LINE GUIDE

A schedule showing the limits of liability to be written by a CEDING COMPANY for different classes of risk and (usually) also showing the lines which can be ceded to PROPORTIONAL REINSURANCE treaties. Also LINE SHEET.


LINE OF BUSINESS [USA]

The general classification of business as utilized in the insurance industry, i.e., fire, allied lines, homeowners, etc. Also CLASS OF BUSINESS.


LINE SHEET [USA]

A schedule showing the limits of liability to be written by a CEDING COMPANY for different classes of risk and (usually) also showing the lines which can be ceded to PROPORTIONAL REINSURANCE treaties. Also LINE GUIDE.


LLOYD'S [UK]

A broad term used to designate a group or groups of individuals known as SYNDICATEs, which ASSUME liability through an UNDERWRITER. Each individual independently assumes a proportionate part of the insurance accepted by the underwriter. The Lloyd's or Lloyd's of London was formerly known as Lloyd's Coffee House and the Underwriter's at Lloyd's.


LOSS ADJUSTMENT EXPENSE - LAE [USA]

The expense incurred by the CEDING INSURER in the defense and settlement of claims under its policies but not the insurer's overhead expenses. The definition of LAE depends on the terms of the reinsurance contract. Also ADJUSTMENT EXPENSE, LOSS EXPENSE, CLAIM EXPENSE. Compare ALLOCATED LOSS ADJUSTMENT EXPENSES - ALAE and UNALLOCATED LOSS ADJUSTMENT EXPENSE - ULAE


LOSS CONVERSION FACTOR [USA]

A factor is applied to the anticipated losses (or loss cost) for an EXCESS OF LOSS REINSURANCE agreement in order to develop the REINSURANCE PREMIUM (or rate.) This factor provides for the REINSURER 's LOSS ADJUSTMENT EXPENSE, overhead expense, and profit margin. Also LOSS LOADING, LOSS MULTIPLIER.


LOSS DEVELOPMENT

The difference between the estimated amount of loss(es) as initially reported to the REINSURER and the amount of an evaluation of the same loss(es) at a later date or the amount paid in final settlement(s).


LOSS EXPENSE [UK]

The expense incurred by the CEDING INSURER in the defense and settlement of claims under its policies but not the insurer's overhead expenses. The definition of loss expense depends on the terms of the reinsurance contract. Also CLAIM EXPENSE, LOSS ADJUSTMENT EXPENSE - LAE, ADJUSTMENT EXPENSE. Compare ALLOCATED LOSS ADJUSTMENT EXPENSE - ALAE and UNALLOCATED LOSS ADJUSTMENT EXPENSE - ULAE


LOSS LOADING FACTOR

A factor applied to the anticipated losses (or loss cost) of an EXCESS OF LOSS REINSURANCE agreement in order to develop the REINSURANCE PREMIUM (or rate.) This factor provides for the REINSURER 's LOSS ADJUSTMENT EXPENSE, overhead expense, and profit margin. Also LOSS MULTIPLIER, LOSS CONVERSION FACTOR.


LOSS MULTIPLIER

A factor applied to the anticipated losses (or loss cost) of an EXCESS OF LOSS REINSURANCE agreement in order to develop the REINSURANCE PREMIUM (or rate.) This factor provides for the REINSURER 's LOSS ADJUSTMENT EXPENSE, overhead expense, and profit margin. Also LOSS LOADING, LOSS CONVERSION FACTOR.


LOSS OCCURRING BASIS

A system used in REINSURANCE whereby the REINSURER is liable only for all losses that occur during the currency of the treaty, irrespective of when the risk attached. Also LOSSES OCCURRING DURING. Compare POLICIES ATTACHING BASIS.


LOSS RATING [USA]

A method of rating, usually applying to EXCESS OF LOSS REINSURANCE, under which the rate is determined based on the ceding insurer's historical loss experience, actual or reconstructed, rather than on the exposure inherent in the business. Both LOSS RATING and EXPOSURE RATING can be used as different rating approaches by the reinsurance underwriter to calculate the price that is quoted. Also EXPERIENCE RATING, MERIT RATING. Compare RETROSPECTIVE RATING and PROSPECTIVE RATING.


LOSS RATIO

In reinsurance, the ratio of losses incurred to net earned reinsurance premiums. The term attritional loss ratio is defined as the ratio of ATTRITIONAL LOSSes to net earned premiums where the term attritional losses is taken to mean losses other than MAJOR LOSSES.


LOSS RESERVE [UK]

Amounts of ceded losses withheld from the REINSURER by the CEDENT in order to provide the cedent with collateral security for the due performance of the obligations of the reinsurer under a REINSURANCE TREATY.


LOSSES OCCURRING DURING

A system used in REINSURANCE whereby the REINSURER is liable only for all losses that occur during the currency of the treaty, irrespective of when the risk attached. Also LOSS OCCURRING BASIS. Compare POLICIES ATTACHING BASIS.


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