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Rate - The cost of a given unit of insurance.
Rating - no claim bonuses and no claim discounts all describe essentially the same thing a discount off your car insurance premium. The discount increases each year provided no claim is made on your policy. It keeps on increasing until it reaches the maximum discount level.
Reciprocal Insurance Exchange - An unincorporated groups of individuals, firms or corporations, commonly termed subscribers, who mutually insure one another, each separately assuming his or her share of each risk. Its chief administrator is an attorney-in-fact.
Recovery Amount - recovered from a third party responsible for a loss on which a claim has been paid.
Re-Entry - Re-entry, which is the allowance for level-premium term policyowners to qualify for another level-premium period, generally with new evidence of insurability.
Reinsurance - In effect, insurance that an insurance company buys for its own protection. The risk of loss is spread so a disproportionately large loss under a single policy doesn't fall on one company. Reinsurance enables an insurance company to expand its capacity; stabilize its underwriting results; finance its expanding volume; secure catastrophe protection against shock losses; withdraw from a line of business or a geographical area within a specified time period.
Reinsurance Ceded - The unit of insurance transferred to a reinsurer by a ceding company.
Reinsurance Recoverables to Policyholder Surplus - Measures a company's dependence upon its reinsurers and the potential exposure to adjustments on such reinsurance. Its determined from the total ceded reinsurance recoverables due from non-U.S. affiliates for paid losses, unpaid losses, losses incurred but not reported (IBNR), unearned premiums and commissions less funds held from reinsurers expressed as a percent of policyholder surplus.
Renewal - The automatic re-establishment of in-force status effected by the payment of another premium.
Renewal Premium - The premium paid for a renewed policy.
Renewal Certificate - A certificate which is used to renew a policy. It refers to the original policy, keeping all of its provisions, without restraining all of the insuring agreements, exclusions, and conditions.
Replacement Cost - The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy.
Replacement Clause - A clause limiting underwriters’ liability for damage to machinery cargo.
Representation - A statement of fact made by the assured or his broker when negotiating an insurance with the underwriter.
Reserve - An amount representing actual or potential liabilities kept by an insurer to cover debts to policyholders. A reserve is usually treated as a liability.
Residual Benefit - In disability insurance, a benefit paid when you suffer a loss of income due to a covered disability or if loss of income persists. This benefit is based on a formula specified in your policy and it is generally a percentage of the full benefit. It may be paid up to the maximum benefit period.
Retaining Wall - Means a wall that supports or confines a mass of earth or water.
Retention - An amount retained by a reinsured when effecting a re-insurance.
Return on Policyholder Surplus (Return on Equity) - The sum of after-tax net income and unrealized capital gains, to the mean of prior and current year-end policyholder surplus, expressed as a percent. This ratio measures a company's overall after-tax profitability from underwriting and investment activity.
Retrocession - Re-insurance of a line accepted as a re-insurance on a long term contract. The original insurer cedes the line and the re-insurer, having arranged re-insurance cover to protect his own interests, retrocedes the line.
Risk - A fortuity. It does not embrace inevitable loss. The term is used to define causes of loss covered by a policy.
Risk - General meaning is a thing or person insured.
Risk Class - Risk class, in insurance underwriting, is a grouping of insureds with a similar level of risk. Typical underwriting classifications are preferred, standard and substandard, smoking and nonsmoking, male and female.
Risk Management - Management of the pure risks to which a company might be subject. It involves analyzing all exposures to the possibility of loss and determining how to handle these exposures through practices such as avoiding the risk, retaining the risk, reducing the risk, or transferring the risk, usually by insurance.
Risk Retention Groups - Liability insurance companies owned by their policyholders. Membership is limited to people in the same business or activity, which exposes them to similar liability risks. The purpose is to assume and spread liability exposure to group members and to provide an alternative risk financing mechanism for liability. These entities are formed under the Liability Risk Retention Act of 1986. Under law, risk retention groups are precluded from writing certain coverages, most notably property lines and workers' compensation. They predominately write medical malpractice, general liability, professional liability, products liability and excess liability coverages. They can be formed as a mutual or stock company, or a reciprocal.
Rules of Practice - A set of rules drawn up by the Association of Average Adjusters to give their members guidance in assessing the relationship of circumstances to general average and particular average losses.
Running Down Clause -The collision liability clause which appears in a policy covering the hull and machinery of a ship. A three-fourths RDC appears in the Institute clauses, whereas a four-fourths RDC appears in American and some other sets of hull clauses.
