In an INSURANCE or REINSURANCE arrangement, the position that absorbs the initial losses arising from damage or destruction. The first loss position can be created through a DEDUCTIBLE where the INSURED bears the losses up to the ATTACHMENT point. If no DEDUCTIBLE exists, the INSURER bears the first loss position up to the POLICY CAP, or the point at which REINSURANCE attaches. See also EXCESS LAYER.

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