Surplus relief

{
  "id": "MLC-T-INS-003747",
  "term": "Surplus relief",
  "field": "Insurance and risk management",
  "definition": "A form of reinsurance that allows a ceding insurer to increase its statutory surplus, which is the excess of its assets over liabilities. An insurer obtains this by ceding policies to a reinsurer, which reduces the ceding company's liabilities for unearned premiums and loss reserves, thereby immediately boosting its surplus-to-premium ratio. Quota share and portfolio reinsurance are two common transactions used to provide surplus relief, particularly for new or rapidly growing insurers.",
  "url": "https://mlchart.com/terminology/insurance/surplus-relief/"
}