Warning
Info
Warning
Info
Simple English definitions for legal terms
cedant
Read a random definition: Retirement benefits
A quick definition of cedant:
Term: CEDANT
Definition: A cedant is an insurance company that transfers some or all of the risk it has underwritten to a reinsurer. This is usually done along with a percentage of the original premium. In simpler terms, a cedant is an insurer that shares the risk of insuring with another company.
A more thorough explanation:
Definition: Cedant is a term used in the insurance industry to refer to an insurer that transfers all or part of a risk it underwrites to a reinsurer, usually along with a percentage of the original premium. It is also known as a cedent or reinsured.
Example: ABC Insurance Company underwrites a policy for a large construction project. However, ABC Insurance Company does not want to bear the entire risk of the policy, so it transfers a portion of the risk to XYZ Reinsurance Company. ABC Insurance Company is the cedant or reinsured in this scenario.
This example illustrates how a cedant transfers a portion of the risk it underwrites to a reinsurer, reducing its exposure to potential losses.