What is the Definition of Fronting?
What is the Definition of Fronting?
A procedure in which a primary insurer acts as the insurer of record by issuing a policy, but then passes the entire risk to a reinsurer in exchange for a commission. Often, the fronting insurer is licensed to do business in a state or country where the risk is located, but the reinsurer is not. The reinsurer in this scenario is often a captive or an independent insurance company that cannot sell insurance directly in a particular country.
Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/
Label: Insurance
Theme: Dictionary of Insurance Terms
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What is the Definition of Fronting?
You can find random definition and meaning of insurance terms below:
Meaning of Original Equipment Manufacturer Parts in Insurance Terms
Sheet metal auto parts made by the manufacturer of the vehicle. (See Generic auto parts)
Meaning of Over-The-Counter/Otc in Insurance Terms
Security that is not listed or traded on an exchange such as the New York Stock Exchange. Business in over-the-counter securities is conducted through dealers using electronic networks.
Meaning of Package Policy in Insurance Terms
A single insurance policy that combines several coverages previously sold separately. Examples include homeowners insurance and commercial multiple peril insurance.
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