Expense allowance

{
  "id": "MLC-T-INS-001401",
  "term": "Expense allowance",
  "field": "Insurance and risk management",
  "definition": "A payment from a reinsurer to the ceding company under coinsurance or modified coinsurance, set as a percentage of the reinsurance premium, to cover the ceding company's costs of issuing and servicing the policies. The percentage is higher in the first policy year, when acquisition costs fall due, than in renewal years. Treaties settle it at the end of each accounting period.",
  "url": "https://mlchart.com/terminology/insurance/expense-allowance/"
}