commutation clause
A commutation clause is a provision in a reinsurance agreement that allows for payment of cash by one party to release the other from all future obligations to pay claims after a certain time period.
commutation clause
A commutation clause is a provision in a reinsurance agreement that allows for payment of cash by one party to release the other from all future obligations to pay claims after a certain time period.
Additional Information
Common in long-term disability (LTD) insurance, where the reinsurer wishes to settle and discharge all future obligations for claims that have a very long payment pattern. It is also used in finite risk reinsurance.
