Glossary

The rehabilitation clause is a provision in many health and disability insurance policies that extends coverage to include vocational rehabilitation of disabled policyholders.

Rehabilitation management involves the development and application of a systematic plan for effectively rehabilitating injured persons. It encompasses the planning, organizing, implementing, and controlling of all the various people and procedures involved in the rehabilitation process. The whole process requires strict attention to proper communication, negotiation, supervision, motivation, and cost control. A risk manager should be actively involved in the rehabilitation management process.

Reimbursement policies are a type of insurance policy in which the insured must first pay losses out-of-pocket and then seek reimbursement for any covered loss from the insurer, as opposed to policies where the insurer is required to "pay losses on behalf of" an insured.

Reinstatement, under many forms of reinsurance and insurance, is the payment of a claim that reduces an aggregate limit by the amount of the claim. Provision is sometimes made for reinstating the policy limit to its original amount. Provision is sometimes made for reinstating the policy limit to its original amount when the original limit has been exhausted. Depending on policy conditions, it may be done automatically, either with or without premium consideration (i.e., a reinstatement premium), or it may be done only at the request of the insured in return for an additional premium.

A reinstatement premium is a prorated insurance or reinsurance premium charged for the reinstatement of the amount of a primary policy or reinsurance coverage limit that has been reduced or exhausted by loss payments under such coverages.

Reinsurance refers to a transaction in which one party, the "reinsurer," in consideration of a premium paid to it, agrees to indemnify another party, the "reinsured," for part or all of the liability assumed by the reinsured under a policy of insurance that it has issued. The reinsured may also be referred to as the "original" or "primary" insurer or the "ceding company."

A reinsurance agreement is an agreement by which one insurance company transfers risk to another (buys reinsurance). Unlike an insurance policy, both parties sign a reinsurance agreement.

Reinsurance assumed is that portion of a risk that a reinsurer accepts from an original insurer (also known as a "primary" insurer) in return for a stated premium.

A reinsurance captive is a special-purpose insurer that operates only on a fronted basis, assuming risk from a ceding company. The reinsurance captive does not issue policies directly to insureds and typically operates on a nonadmitted basis.

Reinsurance ceded refers to that portion of a risk that an original insurer (also known as a "primary" insurer) transfers to a reinsurer in return for a stated premium.