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Reinsurance Legal Jobs — What They Are

You may not have heard of reinsurance. It’s a way that insurance companies share the risk of big losses with other
insurance companies — effectively, it’s insurance bought by an insurance company from another insurance company.
It spreads the risk across many companies, protecting them from large or unforeseen losses. This works in the same
way as ordinary insurance, but on a much larger scale. Reinsurance attorneys work to make sure that contracts benefit
their clients, and, if necessary, take legal action against a reinsurer or other body if a contract is violated. They’re
much like other legal jobs that attorneys may take, but reinsurance jobs are much more specialized.

What Reinsurance Does for
Customers
The benefit of reinsurance to the
end consumer is that it allows
the entire insurance industry
to work more efficiently. The
work that reinsurance attorneys
perform allows insurance
company to insure companies and
individuals for larger amounts, to
be protected against very large
losses, to stabilize operations from one year to the next,
and to protect business against cyclical business trends.
Reinsurance attorneys also provide underwriting expertise
for new markets or new lines of insurance that a company
wouldn’t otherwise be able to access.
Reinsurance Attorney Jobs
The majority of attorney jobs of this type are found in
specialist insurance companies, such as hurricane or
earthquake reinsurers. Most of these companies operate
globally. The company buying reinsurance is called the
ceding insurer. The company selling reinsurance is known
as the reinsurer. Most of the usual reinsurance transactions
with which a reinsurance attorney deals involve sharing risk
between numerous reinsurers. Since reinsurance deals with
indemnification contracts, reinsurance can only be paid after
the ceding insurer has already paid losses under its own
reinsurance or insurance contracts. The insurer’s customers
must be paid before the reinsurance can take effect.
How Reinsurance Works
Reinsurance works much like ordinary insurance, but on
a larger scale. With ordinary insurance, one house which
burns out of 500 will be covered by the premiums paid by
the other 499 homes. However, catastrophic disasters, such
as hurricanes or wildfires, might destroy all the homes in
one area. In that case, the premium paid by unaffected
policyholders wouldn’t be adequate to cover all the
destroyed homes.
A policy advised by a reinsurance attorney would protect
against this situation. Other areas will not have suffered
from a catastrophe, allowing multiple insurers to spread the
risk of potential catastrophes. This allows more policies to
be paid by the insurer.
Different Types of Reinsurance
As part of reinsurance legal jobs, you’ll encounter two
different types of reinsurance. These are Excess of Loss
Reinsurance and Proportional Basis Reinsurance. An Excess
of Loss contract means that the ceding insurer keeps all
losses up to a particular level, and the reinsuring company
covers any losses beyond that level. The contract usually
states a ceiling for loss coverage. In Proportional Basis
Reinsurance legal jobs, all losses and premiums between the
reinsurer and ceding insurer are prorated on a prearranged
basis. This type is frequently used in property reinsurance.
Types of Reinsurance Contracts
Two types of reinsurance contracts might be encountered
by attorneys in this field. Treaty reinsurance comes in
the form of a broad contract that covers a block of the
ceding company’s total book of business, such as an entire
property class. This type of reinsurance automatically
covers all risks in the specific business class covered, unless
specifically excluded in the contract. While the reinsurer
or their reinsurance attorney isn’t required to review every
individual risk associated with this treaty, it is important to

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be aware of the ceding insurer’s overall underwriting policies
and business policies.
Facultative reinsurance is written for a specific risk of the
ceding insurer, and generally covers catastrophic risks. This
type of reinsurance covers individual underlying policies,
and is written on a policy-specific basis. Parties negotiate
the terms and conditions for each individual contract
separately. The ceding insurer provides the reinsurer with
an individual risk policy, which the reinsurer may reject or
accept.
Reinsurer Insurance
A reinsurance attorney may also
encounter retrocession — insurance
for reinsurance. Reinsurers
buying this kind of reinsurance
are called retrocessionaries. The
reinsurers selling retrocession are
called retrocedants. Retrocession
is another way to spread the
reinsurance risk. One thing that
you’ll encounter as a reinsurance attorney is the common
tendency to buy reinsurance protection from other reinsurers.
If a reinsurer is providing proportional basis reinsurance, it may
need to protect itself from catastrophes. Reinsurers providing
policies on an excess of loss basis might need to protect their
companies against accumulated losses.
Reinsurance Contracts in Law Jobs
Like all other contracts in legal jobs, reinsurance contracts
must be created to clearly express both parties’ intent. The
rules of contract interpretation and general contract law
apply to reinsurance contracts. Accordingly, reinsurance
lawyers must have a good knowledge of general contract
law in addition to those of their legal specialty.
Average Reinsurance Attorney Salary Expectations
The average salary that can be expected for reinsurance
attorneys is $73,000. Like all jobs, the amount you’ll be
paid will vary depending on where you live, what the local
cost of living is, and the prestige of the firm for which you
work. Your experience and education will have an impact on
pay as well.
Conclusion
Reinsurance attorneys are a specialized branch of the legal
field. Because of that, they require specific knowledge
in addition to the typical requirements for becoming an
attorney. People seeking this type of position should have
experience in dealing with the insurance and reinsurance
field. Like many specialized positions, this field isn’t
growing rapidly, but maintains a steady pace, since the
demand for reinsurance attorneys is unlikely to abate.

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