spread loss reinsurance treaty

  • Pays the excess over a given figure on single losses, and logically requires a sufficient number of losses exceeding the given figure to enable the excess amounts to average out over the years. Five years is the usual period, with the premium adjustable within fixed minimum and maximum limits according to the company’s experience.

    Internal Revenue Service 1
    See also treaty

1Internal Revenue Service, Internal Revenue Manual 4.42.6 Glossary, http://­www.irs.gov/­irm/­part4/­irm_04-042-006.html (last accessed Dec. 22, 2009).