DEFINITION of 'Cedent'

A party to an insurance contract who passes financial obligation for certain potential losses to the insurer. In return for bearing a particular risk of loss, the cedent pays an insurance premium. The term cedent is most often used in the reinsurance industry, although the term could apply to any insured party.


Insurance companies are regulated so that they may not write policies in excess of a certain percentage of their collateral. However, insurance companies do not have to hold collateral against policies that are reinsured. Most insurance companies employ some sort of reinsurance program in order to more efficiently manage their operations.

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  1. What is reinsurance?

    Reinsurance occurs when multiple insurance companies share risk by purchasing insurance policies from other insurers to limit ... Read Full Answer >>
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  3. Does renters insurance cover jewelry?

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  4. Why might landlords require renters insurance?

    Landlords can require renters insurance to lower their own liability and insurance costs. According to data from the Insurance ... Read Full Answer >>
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