Definitions for "Automatic Reinsurance"
A type of reinsurance under which a reinsurer agrees to automatically accept, within limits, the risks transferred by a ceding company. In this agreement, the ceding company assumes full underwriting responsibility for all cases reinsured. Contrast with facultative reinsurance. See also reinsurance. TO TOP
reinsurance agreement (treaty) that provides for the automatic reinsurance of policies that are within certain defined limits. Under this type of treaty the insurance company must transfer the risk and the reinsurer must accept this transfer. Also see facultative reinsurance.
An agreement that the insurer must cede and the reinsurer must accept all risks within certain explicitly defined limits. The reinsurer undertakes in advance to grant reinsurance to the extent specified in the agreement in every case where the ceding company accepts the application and retains its own limit. See also Treaty.