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Aggregate Stop Loss Reinsurance


Term Of The Day – Aggregate Stop Loss Reinsurance

The aggregate stop loss reinsurance is a  type of reinsurance is becoming very rare and expensive. A form of excess of loss reinsurance which indemnifies the reinsured against the amount by which the re-insureds  losses incurred during a specific period exceed either an agreed amount or an agreed percentage of some other business measure. The reinsurer and their insured must have some pre-agreed level that once attained shifts the total risk to the reinsurer.

US 20$ Aggregate Stop Loss Reinsurance series 2006
Wikimedia Commons – Design from the United States Treasury Department

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.


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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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