<P> Excess of loss contracts, like those commonly used for umbrella and general liability insurance, or to insure against property losses, will typically have a low ratio of premium paid to maximum loss recoverable . This ratio (expressed as a percentage), commonly called the "rate on line" for historical reasons related to underwriting practices at Lloyd's of London, will typically be low for contracts that contain reasonably self - evident risk transfer . As the ratio increases to approximate the present value of the limit of coverage, self - evidence decreases and disappears . </P> <P> Contracts with low rates on line may survive modest features that limit the amount of risk transferred . As rates on line increase, such risk limiting features become increasingly important . </P> <P> The analysis of reasonableness and significance is an estimate of the probability of different gain or loss outcomes under different loss scenarios . It takes time and resources to perform the analysis, which constitutes a burden without value where risk transfer is reasonably self - evident . </P> <P> Guidance exists for insurers and reinsurers, whose CEO's and CFO's attest annually as to the reinsurance agreements their firms undertake . The American Academy of Actuaries, for instance, identifies three categories of contract as outside the requirement of attestation: </P>

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