Reinsurance occurs when the coverage offered by an insurer to its customers is insured by a third party. The insurance company is part of the reinsurance company and the latter usually assumes some of the risk –the insurance coverage offered by the insurer. A reinsurance company only insures insurance companies, not individuals.
Object of Insurance
Object of Insurance can be any event which, if it materializes, will cause the loss of a legal right or result to a legal liability.
Exemption is the agreed amount that is deducted from the compensation paid by the insurer to the policyholder; this amount will thus be borne by the policyholder. The policy includes a specific condition with which it is agreed that the insurer shall be exempt from payment of a part of the losses whenever it is asked to pay compensation. The beneficiary will be charged with this amount.
The amount, if applicable, that must be paid by an insurance company to restore all or part of a loss. The damage must be the result of a harmful event that is covered by the policy.
Insurance is a common fund to which many parties are contributing in order to cover themselves from a random, unexpected and pre-agreed loss and/or damage.
Sum insured/Insured capital
Sum insured or insured capital is an insurer’s maximum limit of liability. This limit is agreed between the insurer and the insured or policyholder; it is stated in the insurance policy and is used to calculate premiums.
An Insured is a person whose life is insured. Also considered as Insured are the main Insured person’ protected members, i.e. his/her spouse and unmarried children. These members can be insured as part of some additional supplementary coverages. These coverages are available in certain insurance products.
The Policy is a private written agreement that is issued by the insurer to validate the insurance contract. To be effective, it needs to be is issued exclusively by the insurance company and signed by its legal representative. It describes the risks for which the insured is covered and the amounts for which coverage is provided.
An Insurance Company insures its customers against the risks described in the insurance policy and undertakes to pay the beneficiary in case of loss. Insurance companies are divided into two categories depending on their purpose:
- Non-Life Insurance Companies (they offer insurance against losses).
- Insurance Companies offering Life Insurance.
The term “Insurance Risk” has three different meanings:
- The person insured.
- The uncertainty or probability of occurrence of a damaging event and the size of the loss.
- The damaging event against which insurance is taken.
An Insurance Agent is a natural or legal person who legally undertakes insurance business in the name and on behalf of one or more insurance undertakings and is compensated for this business with commission.
An Insurance Consultant is a natural or legal person who studies the market, and presents and proposes insurance solutions to cover customer needs on behalf of insurance companies or insurance agents or brokers. An Insurance Consultant is associated with insurance companies or agents by contractual agreement and has no right to sign insurance policies or represent an insurance company, insurance agent or broker.
The amount paid for the provision of the insurance coverage described in the insurance policy.
A Βeneficiary is a person or persons receiving the insured amounts in the event that an insurance risk materializes. The Beneficiary may change during the insurance period following a written request by a party and the agreement of the insured person(s). The Beneficiary may be a natural or legal person.
Risk Premium is the additional premium paid by an insured person because of their profession or health. Professional risk premiums are determined by the specific characteristics of certain professions. Health risk premiums are determined in accordance with the health problems of the insured.
A Party or Policyholder is a natural or legal person entering into an insurance policy with the company. The Party may be different from the insured person, however there exists a family, professional or other relationship justifying that party’s insurance interest in that person.