What is Stop Loss?
Stop Loss A type of reinsurance or policy provision in which the insurer is protected against losses above a specified limit, after which the reinsurer or stop loss cover assumes liability.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Stop Loss” Used in Practice?
The insurer purchased stop loss reinsurance to cap aggregate claims for catastrophic events.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Stop Loss?
A type of reinsurance or policy provision in which the insurer is protected against losses above a specified limit, after which the reinsurer or stop loss cover assumes liability.
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