Reinsurance expert witnesses may opine on reinsurance contracts, reinsurers, and reinsurance policies. Legaldictionary.com defines reinsurance:
A reinsurance contract is a contract of indemnity, meaning that it becomes effective only when the insurance company has made a payment to the original policyholder. Reinsurance provides a way for the insurance company to protect itself from financial disaster and ruin by passing on the risk to other companies. Reinsurance redistributes or diversifies the risk or threat associated with the business of issuing policies by allowing the reinsured to show more assets by reducing its reserve requirements. The reinsurance industry became more popular during the late 1990s and early 2000s because natural disasters and mass tort litigation resulted in large payouts by insurance companies. Because of the large size of the payments, some insurance companies became insolvent.
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