Commutation agreement

{
  "id": "MLC-T-INS-000857",
  "term": "Commutation agreement",
  "field": "Insurance and risk management",
  "definition": "A formal contract between an insurer and a reinsurer, or between an insurer and a claimant, to settle all outstanding obligations for a specific claim or set of claims with a single, final payment. This agreement terminates the original contract's ongoing payment schedule. It is often used in reinsurance to close out old treaties or in workers' compensation to settle long-term disability claims.",
  "url": "https://mlchart.com/terminology/insurance/commutation-agreement/"
}