Ceded Reinsurance Leverage Law and Legal Definition

Ceded Reinsurance Leverage is the ratio of the reinsurance premiums ceded, including net ceded reinsurance balances from non-US affiliates for paid losses, unpaid losses, incurred but not reported (IBNR), unearned premiums and commissions, and deducting funds held from reinsurers, plus ceded reinsurance balances payable, to policyholders' surplus. Ceded Reinsurance Leverage ratio is an indicator to the company's dependence upon the security provided by its reinsurers and its potential exposure to adjustment on such reinsurance.