PASSIVE RETENTION
When a company unexpectedly retains risk leading to losses. This usually occurs when they are not properly managing their reserves or self insurance. Refer to retention and risk retention
Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.
When a company unexpectedly retains risk leading to losses. This usually occurs when they are not properly managing their reserves or self insurance. Refer to retention and risk retention
Provides bonuses and cash to management if the company does well.
When managers buy extra stock to boost prices higher. This is done at the quarter and end of the financial year. Refer to window dressing.
An insured with less risk of loss and claims than the normal applicant. Insurers find these risks to increase their underwriting income and lower settlements.
Stock that has a first claim on assets. If distress should occur these stockholders get first dibs.
A strategy that uses external borrowed funds instead of internal funds. Refer to quasi arbitrage.
When investors get cashflows from assets in modified or fully modified forms. The assets can be mortgages, certificates, bonds, and loans.
When shareholders must pay losses from their personal assets. Refer to limited liability.
Risk caused by adverse movements in the market. It is preventable by diversifying. Refer to correlation and correlation risk.
A security that pays investors periodic dividends but does not allow them board vote. There are many forms of this stock.
An investment that comes from a private not corporate investor. The investor usually exits at the first public sale.
An insurer owned by a single company. They write insurance for that company only. While easy to manage it may be more risky. AKA single parent captive. Refer to agency captive, captive,
An option whose payment depends on the ending market price of an asset. There are many types of this option. Refer to path dependent option.
The risk that occurs when a large option trades near strike price at its maturity. Whether above or below the strike price it changes the hedge.
How a portfolio is managed. Risk and returns are measured to create diversification strategies.
Funding arranged before loss is incured. It is less expensive than post loss financing because the capital is there when its needed. Refer loss financing.
A debt not registered with the securities regulator. It is sold on a ceveat emptor basis to only experienced investors. It is illiquid and only transfers to a short list of buyers.
A swap transaction that allows an insurer to diversify their portfolio by exchanging uncorrelated catastrophic hazards. Refer to catastrophe reinsurance swap.
A defense which insists that the plaintiff never had the right to institute the suit, or that, if he had, the original rightis extinguished or determined.
One which was available to a party and of which he might have had the benefit if he had pleaded it in due season, but which cannot afterwards be heard as a