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Insurance Definition: FRONTING

By Compuquotes Team on March 27th, 2008

FRONTING:

Definition:

  • A procedure in which a primary insurer acts as the insurer of record by issuing a policy, but then passes the entire risk to a reinsurer in exchange for a commission. Often, the fronting insurer is licensed to do business in a state or country where the risk is located, but the reinsurer is not. The reinsurer in this scenario is often a captive or an independent insurance company that cannot sell insurance directly in a particular country.

Information provided by Insurance Information Institute

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