LAYER – A horizontal segment of the liability insured, e.g., the second $100,000 of a $500,000 liability is the first layer if the cedant retains $100,000 but a higher layer if it retains a lesser amount.

LEAD REINSURER – The reinsurer who negotiates the terms, conditions, and premium rates and first signs on to the slip; reinsurers who subsequently sign on to the slip under those terms and conditions are considered following reinsurers.

LETTER OF CREDIT (LOC) – A financial promise issued by a bank that ensures funds will be available if requested.  For captives, LOC’s (a) can be used in place of or in addition to cash or other capital, and (b) to securitize the fronting insurer’s reinsurance created by the captive.

LIMITED LOSSES – Losses with claim sizes of specific occurrences limited to a particular value or dollar amount.

LOSS ADJUSTMENT EXPENSE (LAE) – Means all expenditures of an insurer associated with the adjustment, recording and settlement of claims other than the indemnity itself. There are two types of LAE.  Allocated Loss Adjustment Expense (ALAE) is identified by the claim file in the insurers record, such as attorney’s fees.  Unallocated Loss Adjustment Expense (ULAE)  is the fixed cost an insurer bears to be able to process claims regardless of the individual claims.

LOSS DEVELOPMENT – The difference between the original loss as originally reported to the reinsurer and its subsequent evaluation at a later date or at the time of its final disposal.  A serious problem to reinsurers who, being involved in the more serious cases, must frequently wait many years for the final disposition of a loss.

LOSS EVENT – The total losses to the ceding company or to the reinsurer resulting from a single cause.

LOSS PORTFOLIO TRANSFER – The transfer of incurred losses to a third party.  The assuming party hopes to profit by investing the sale price it has received over the length of time it requires to settle the claims it has assumed.

LOSS RATIO – Proportionate relationship of incurred losses to earned premiums expressed as a percentage.

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After experiencing tremendous losses due to a natural disaster uncovered by my commercial carrier, I knew it was time to form a captive and shopped around for a captive manager...we couldn’t be happier that we chose Elevate.

Joe M.

Communication is quick and effective, documents are always organized and available and my questions are always answered efficiently and professionally.

Adam G.

We chose Elevate because of their reputation in our business community, and their services have exceeded expectations. We trust Elevate.

John R.

I have worked with Jerry Messick and the Elevate Captive team since 2012. They have been instrumental in guiding us properly on how to implement and run a captive successfully. The due diligence and proactive service on the part of the Elevate team is unrivaled. Their product knowledge and how to use the instrument to our benefit, while providing sound risk management and compliance principles is another huge differentiating factor for their firm. In addition, the team of experts that Elevate has referred us to in the legal and financial advisory areas has turned out to be top notch. The Captive is only as good as the entire team. Finally, it has to be mentioned that we “just plain like” Jerry and Co.. Friendly, smart and easy to work with. A real pleasure.

John H.