Home > Glossary

Commutation Clause

Commutation Clause

Definition

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. Common in long-term disability insurance, where the reinsurer wishes to settle and discharge all future obligations for claims that have a very long payment pattern. Also used in finite risk reinsurance.

Related Products

Navigation

Social Media

User ID: Subscriber Status:Free