Chapter 27 — Further Reading

Sources are grouped by the book's three citation tiers (see the bibliography for the full, de-duplicated list). Tier 1 is verified canonical; Tier 2 is real practice/literature whose exact citation we have not pinned to a single reference here; Tier 3 is the chapter's own constructed teaching material.

Tier 1 — Verified canonical

  • The NAIC Credit for Reinsurance Model Law and Regulation. The framework governing when a U.S. ceding insurer may take balance-sheet credit for reinsurance — authorized vs. unauthorized reinsurers, collateral (trusts, letters of credit), and the more recent certified/reciprocal-jurisdiction reinsurer provisions. This is the regulatory spine under §27.6's collectability discussion.
  • Lloyd's of London. The marketplace (not a single company) of syndicates that has been central to catastrophe, marine, and specialty reinsurance for centuries; its origins are covered in Chapter 2. A primary public reference point for how large and unusual risks are placed.
  • Hurricane Andrew (1992) and Hurricane Katrina (2005). Documented public catastrophe events that reshaped the property-catastrophe reinsurance market, accelerated probabilistic catastrophe modeling, and drove waves of new (notably Bermuda) reinsurance capital. Treat all magnitudes qualitatively (Case Study 1).
  • The London Market Excess of Loss (LMX) spiral, late 1980s–early 1990s. A real, much-studied episode in which opaque, interconnected retrocession amplified catastrophe losses and contributed to distress at Lloyd's; the canonical illustration of the limits of passing on risk (Case Study 2).
  • AM Best (and the other rating agencies). Financial-strength ratings of reinsurers — the basis for assessing a reinsurer's collectability, which §27.6 frames as part of the cedent's own underwriting. Rating agencies are introduced in Chapter 3.

Tier 2 — Attributed, specifics unverified

  • The Institutes (CPCU / ARe — Associate in Reinsurance) reinsurance curriculum. The standard professional treatment of treaty vs. facultative, proportional vs. non-proportional, the reinsurance contract, reinsurance accounting (ceding commission, reinstatement premiums), and reinsurance program design — the certification-depth reference for everything in this chapter.
  • Reinsurance Association of America (RAA) materials. Industry references on the structure and function of the U.S. reinsurance market, contract wordings, and the credit-for-reinsurance framework in practice.
  • Catastrophe-model vendor methodology documentation (the major commercial cat-model providers). The probabilistic basis on which catastrophe reinsurance is priced and cat programs are sized to a return period; developed in full in Chapter 30. The post-Andrew adoption of these models is a well-attested industry shift.
  • Insurance-linked securities (ILS) / catastrophe-bond market literature. Reference material on how capital-market investors take on catastrophe risk (cat bonds, collateralized reinsurance, sidecars) for a largely uncorrelated return — the "alternative capital" that reshaped property-cat reinsurance (§27.6).
  • Reinsurance broker market reports (the major reinsurance brokers' periodic renewal commentaries). The standard public window onto the reinsurance underwriting cycle — hardening after major losses, softening when capital is plentiful — referenced qualitatively in §27.6.

Tier 3 — Illustrative / constructed (this chapter)

  • Harbor Steel & Fabrication, Inc. — the running Underwriting-File project; the \$20M building limit, the \$5M net retention, the surplus-share treaty, and the cat XOL cession are all illustrative teaching values.
  • The chapter's worked structures — the quota-share and surplus-share tables (§27.3), the three-layer per-risk tower (§27.4), the gross-vs-net split table (§27.5), and the toy retrocession "ring" in Case Study 2 — are all constructed teaching examples; none represents a real program or real figures.

If you read only one thing: work through the reinsurance tower in §27.4 until you can take any loss figure and walk it up the layers — who pays the retention, who pays each XOL layer, where it stops — and then read §27.5 on net vs. gross. Those two ideas, the tower and the net-versus-gross lens, are what turn reinsurance from background trivia into something you use to price and defend a catastrophe-exposed account at the desk.