Term Of The Day – Aggregate Stop Loss Reinsurance
I have seen this type of reinsurance often in alternate risk work comp policies such as large deductible, captives, and self insurance. One the aggregate level of workers comp claims is “busted”, the reinsurance carrier will be 100% responsible for all the claim payments.
The aggregate is usually a very large amount. The reinsurer does not want to be on the hook for all payments unless the aggregate is huge. I have seen an aggregate level of $20 million or higher in some agreements.
There are many variation on the aggregate stop loss reinsurance theme.
©J&L Risk Management Inc Copyright Notice