Category: R

When a bank refuses funds for an insurance company due to previous losses. It is illegal in many jurisdictions.

Using a retrocession contract to defer responsibility from the retrocedant to a retrocessionaire. Refer to cede, recessionaire, and retrocedant.

When an inthemoney option is turned into a latent option because the barrier is below the strike price. AKA kickout option. Refer to reverse knockin option.

A delay in the funding of losses until they are more affordable instead of transferring them to a third party. Refer to finite insurance contract and finite reinsurance.

A calculation where expected losses and expenses are subtracted from revenue, income from capital is added, and this amount is divided by capital to determine risks on projects being considered for investment.

An insurers gross profitability. The higher the rate on a line the more gross profit.

Resources used to absorb risk in order to keep in the national regulatory requirements. Refer to economic capital, riskadjusted capital, tier 1 2 and 3 capital.

An attempt by a reinsurer who accepts the transfer of risks to expand their reinsurance portfolio. Refer to retrocedant and retrocession.

Stocks that are offered for purchase by the public by companies that have been privately purchased in an effort to reduce their debt.

Detecting actual, perceived, or anticipated financial and operating risks. Refer to risk management, risk quantification, and risk monitoring.

A safe investment model used to compare different risks of investment opportunities to determine the best choices a firm should make. Refer to discount rate and risk premium.

Assets in a bank exposed to interest rate changes. Refer to asset liability management and ratesensitive liabilities.

Reactivating insurance cancelled due to nonpayment. The insurance company has the right to charge a higher premium.

An insurance policy that covers existing and incurred but not yet reported losses up to a dollar amount. Refer to loss portfolio transfer and retrospective finite policy.

When a lender gives monthly payments to a borrower using their property equity. This is usually done by elderly homeowners resulting in the borrower eventually owning the home.

A decision guided by cost/benefit analysis made by a firm to control, retain, eliminate, or expand its risks. Refer to risk identification, risk monitoring, and risk quantification.

Presentations organized by a firm introducing a new issue of securities to possible investors. AKA dog and pony show.

Liabilities of a bank that are exposed to interest rate changes. Refer to asset liability management and ratesensitive asset.

A transaction between a related entity and a company.

An insurance policy structured as adverse development cover loss portfolio transfer, and retrospective aggregate loss cover allowing management of existing liabilities and losses. AKA postfunded policy. Refer to prospective finite policy.