Personal Guide in Insurance World
What does it means when an Life Insurance company states?
12Mar2010 Filed under: reinsurance Author: adminthat a claim has been sent to the reinsurance department, is that bad . I don’t know and the rep didn’t know either. Please help.
Reinsurance is when the insurance company gets another insurance company to insure some of the risk of the policy. Usually it means that they found something in underwriting that they don’t like. Because of HIPA they won’t be able to share any that information with the agent/rep, but you should be able to request it after the policy is either issued or declined. It could be any number of things so don’t get too worked up about it, but I would definitely request the information if you get issued a rated policy or if you get declined.
4 Responses to “What does it means when an Life Insurance company states?”
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Matthew S
March 12th, 2010 at 1:06 pm
Reinsurance is when the insurance company gets another insurance company to insure some of the risk of the policy. Usually it means that they found something in underwriting that they don’t like. Because of HIPA they won’t be able to share any that information with the agent/rep, but you should be able to request it after the policy is either issued or declined. It could be any number of things so don’t get too worked up about it, but I would definitely request the information if you get issued a rated policy or if you get declined.
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Chris C
March 12th, 2010 at 1:47 pm
Re-insurance department is when you have been assessed a higher than normal risk class. This is typically not a good thing, as your policy will likely come back as rated or possibley declined.
If your rep doesn’t knwo what the re-insurance department is, perhaps you should get a new one becuase it makes me beleive he doesn’t understand how underwriting works and that could be a huge issue when it comes to claims time if he’s made a mistake.
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Financial Advisor in Canada
James N
March 12th, 2010 at 2:30 pm
Often when the policy face amount is large, a company will pass part of the liability to a re-insurer. In other words, if you have a 1Million policy with Pru, they may contract with someone like Swiss Re who will take a portion of the risk. Pru may take 700K and contract with Swiss Re for the 300k balance . The ceding company , Pru will pay a premium to the reinsurer, Swiss Re. If a claim arises, Pru will pay their share and send the claim to Swiss Re for the balance. It is a legitimate and time honored practice and you should not have to be concerned as long as the situation is as you described. Good luck.
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Lots of time working in and around insurance companies……..Your rep should know this..
mbrcatz
March 12th, 2010 at 3:15 pm
Reinsurance, is an insurance company’s insurance company, for the large claims. They would NOT handle a claim directly.
I’m guessing, that you misunderstood something, as an insured would NOT have a claim passed over to a reinsurance department.
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