[E053]
A company wishing to protect itself in the event its net loss for a given year rises above a certain percentage may purchase reinsurance which pays in excess of that figure up to a higher agreed percentage, beyond which the company is once more liable. In short, a plan which takes the sting out of an above-average net loss ration.
(See Stop Loss Reinsurance.)
Copyright: The Rough Notes Company, Inc., 1998, All Rights Reserved. 3040100