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TARGET RISKS
Risks designated in reinsurance treaties or contracts by the reinsurer that are specifically excluded (e.g., high valued bridges, tunnels, fine arts collections), because they normally are of such size and capacity demand as to require individual acceptance, lest "blind" cessions under automatic reinsurance overline the reinsurer.


TERM
+ The time period during which a reinsurance contract remains in effect.


TERMINATION CLAUSE
+ Continuous contracts remain in force until affirmative notice is given by one of the parties to terminate. This clause details the requirements of the notice. See SPECIAL TERMINATION CLAUSE.


TRADE RATIO
The combination of loss incurred to earned premiums ratio and incurred expense to written premiums ratio. Also known as Combined Ratio and OPERATING RATIO.


TRADING DOLLARS
+ In reinsurance, when the premium payments approximately equal the benefits.


TREATY
+ A reinsurance agreement between the reinsured company and the reinsurer, usually for one year or longer, which stipulates the technical particulars applicable to the reinsurance of some class or classes of business. Reinsurance treaties may be divided into two broad classifications: a) the participating type, which provides for sharing by reinsured and reinsurer of insurance policy liability, premiums, and losses; and b) the excess type, which provides for indemnity by the reinsurer only for loss which exceeds some specified predetermined amount. For different forms, see QUOTA SHARE, SURPLUS SHARE, EXCESS OF LOSS, FIRST SURPLUS, SECOND SURPLUS, SPREAD LOSS, STOP LOSS, and CATASTROPHE.


TREATY BALANCE
See BALANCE.


TREATY REINSURANCE
+ A standing agreement between reinsured and reinsurer 1) for the cession and assumption of certain risks as defined in the pro rata treaty, or 2) for indemnity by the reinsurer only for the reinsured's losses above the reinsured's loss retention. While most pro rata treaty reinsurance provides for automatic cession and assumption, it may be optional or semi-obligatory and is not necessarily obligatory.


TRENDING
The necessary adjustment of historical statistics (both premium and losses) to present levels or expected future levels in order to reflect measurable changes in insurance experience over time which are caused by dynamic economic and demographic forces and to make the data useful for determining current and future expected cost levels.


TURN
Referred to as "the turn," this word describes the excess of reinsurance commission received by a ceding company over its actual costs incurred in producing the business ceded. The excess is considered a profit to the ceding company. See CEDING COMMISSION.


TURNKEY PRODUCT
One built, supplied, and installed in a complete condition, ready to be operated.


TWO-RISK WARRANTY
+ A provision in a property catastrophe excess treaty (as distinguished from a casualty catastrophe treaty) to exclude one-risk exposures by requiring that there be at least two risks involved in an occurrence to recover from the property catastrophe excess treaty. See CASUALTY CATASTROPHE COVER and CLASH COVER.