Glossary

A reinsurance treaty is an agreement between an assuming and ceding company to cede and assume all risks within a class.

Reinsurance wheel refers to a procedure for retroceding individual life insurance risks in excess of a reinsurer's own retention to a group of retrocessionaires (up to their subscribed limit) in rotation, the order being determined by their positions as spokes on an imaginary wheel.

Reinsured refers to an insurer that contracts with a reinsurer to share all or a portion of its losses under insurance contracts it has issued in return for a stated premium. A reinsured is also called the "ceding company."

A reinsurer is an insurer that accepts all or part of the liabilities of the ceding company in return for a stated premium.

Reinsurer's margin refers to the "profit and administration" factor of the reinsurer, generally calculated on gross cession.

Reissuance restatement refers to a financial restatement revision that pertains to a serious, material accounting error and that therefore requires a reissuance of a past financial statement. Reissuance restatements contrast with revision restatements, which address relatively small, less consequential accounting errors that do not require the reissuance of a past financial restatement. Reissuance restatements sometimes result in lawsuits against the directors and officers of a corporation in which shareholders allege that the directors and officers violated their fiduciary duties to protect the interests of shareholders. These types of claims are known as financial restatement claims.

Related claims provisions state that if more than one claim results from a single wrongful act, and if claims are made during more than one policy period, the insured is entitled to the limit applicable when the first claim was made. This is as opposed to the insured receiving the sum of the limits from the policy periods when all claims were made. In recent years, this term has replaced the term "noncumulation of limits provision," which has essentially the same meaning in both common usage and within policy forms. The related claims provision is also sometimes referred to as the "interrelated claims provision," although this usage is less common.

Related party insurance income (RPII) refers to premium income to an offshore insurance company from policies issued to shareholders of the company. RPII is a complicated subject. One of its aspects is that if less than 20 percent of a captive's income is RPII, US federal income tax treatment is more favorable.

The related product liability exclusion is an exclusion of liability found in some architects and engineers (A&E) professional liability policies precluding coverage of claims involving products that are manufactured or designed by the insured. The rationale for the exclusion is that if a third party suffers bodily injury (BI) or property damage (PD) from the insured's products, the insured's commercial general liability (CGL) policy should cover the loss.

Related risk refers to the risks of insureds owned by or affiliated with the owner(s) of or a participant(s) in a captive.