Cedent

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.

BREAKING DOWN 'Cedent'

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.



RELATED TERMS
  1. Cumulative Collusive Excess Cover

    A reinsurance contract in which losses over a predetermined limit ...
  2. Net Line

    The amount of risk that an insurance company retains after subtracting ...
  3. Yearly Renewable Term Plan of Reinsurance

    A type of life reinsurance where mortality risks are transferred ...
  4. Reinsurance Ticket

    A notification made by an insurer which discloses the different ...
  5. Time And Distance Policy

    A reinsurance treaty in which a ceding insurer transfers a lump ...
  6. Reinsurance Credit

    An accounting entry made by an insurer for premiums ceded to ...
Related Articles
  1. Investing

    The Industry Handbook: The Insurance Industry

    As a result of globalization, deregulation and terrorist attacks, the insurance industry has gone through a tremendous transformation over the past decade. In the simplest terms, insurance of ...
  2. Personal Finance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  3. Personal Finance

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
  4. Managing Wealth

    How Does Reinsurance Work?

    Reinsurance is a practice in which insurers transfer portions of portfolios to other parties in order to reduce their exposure to claims.
  5. Personal Finance

    Bundle Your Insurance For Big Savings

    Bundling your insurance can save you money and time. Read on to see how get the most out of multiline insurance discounts.
  6. Personal Finance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  7. Personal Finance

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  8. Trading

    Intro To Insurance: Conclusion

    By Cathy ParetoInsurance is an integral part of any personal financial plan. The type of insurance and the amount of coverage you obtain all depends on your unique financial and family circumstances, ...
  9. Managing Wealth

    World's Top 10 Insurance Companies

    These are the 10 largest insurance companies in the world.
  10. Personal Finance

    Getting Life Insurance in Your 20s Pays Off

    Find out how Americans in their 20s can benefit from a well-thought-out life insurance policy, especially if they are able to build cash value for retirement.
RELATED FAQS
  1. What is reinsurance?

    Reinsurance occurs when multiple insurance companies share risk by purchasing insurance policies from other insurers to limit ... Read Answer >>
  2. What risks do I face when investing in the insurance sector?

    Read about the unique challenges faced by insurers, and learn how those challenges manifest themselves as risks for equity ... Read Answer >>
  3. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  4. Can your insurance company cancel your policy without notice?

    Learn about your rights as an insured when it comes to your insurance policy being canceled, including how to access your ... Read Answer >>
  5. What demographic trends are creating potential profits for insurance companies?

    Discover the ways in which insurance companies can profit from demographic trends. Two major ones are aging populations and ... Read Answer >>
  6. How does the insurance sector work?

    Learn more about the insurance sector, a historically safe place for equity investors and the home of some of the largest ... Read Answer >>
Trading Center