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Indexing Indexation

Indexing, Indexation


Indexing, Indexation — the adjustment of a cedent's retention and the reinsurance limit by a measure of economic activity such as the consumer price index (CPI). Under indexation, the cedent's original retention and the reinsurance limit are multiplied by the result of dividing the index on the settlement date by the index as of the effective date of the reinsurance agreement.

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