Does Your Policy Require Reinsurance?


Key Points: 

  • Definition
  • When it applies
  • Identifying the amount
  • Funding

What is Reinsurance? 

When the insurance policy insures larger files, it is required that Insurance is purchased to cover the insurance. This is called “Reinsurance”. Essentially, it limits the amount of loss for covered matters. 

This is not an increase in the base premium. Rather it is a cost shared by the underwriter and the agent as it protects both parties. 

When does Reinsurance apply? 

When a file reaches over $3,000,000, reinsurance applies. If the file exceeds $20,000,000 the reinsurance amount must be manually calculated and updated in EPIC by ATGF underwriting. 

Where do I find it in EPIC? 

As soon as the dollar amounts of the file are entered into EPIC, and enough information has been entered to print a draft commitment, the Premium Calculator determines the premium on the file. This is found on the Policy/Master Action List tab. 

Without even opening the tab, it will show the final amount to remit to ATGF. This includes the reinsurance. 

Figure 1 - Premium Calculator and Remit to ATGF

As you can see above, the premium calculator is showing the amount to remit to ATGF. But how does one know what was the cost of the Reinsurance? 

By clicking on the Premium Calculator, the breakdown of costs pops up and one can see the Reinsurance amount (Figure 2).

Figure 2 - Agent Reinsurance Contribution

The above image shows the amount of Agent Reinsurance Contribution. 

These numbers do carry over to both the Invoice and monthly billing report. The Invoice is under the Document Tab, then Closing Documents, then under ATGF Invoice. The monthly billing report can be found at Tools, and then select the monthly billing report. 

Figure 3 - Tools > Agent Monthly Billing Report

How is this paid? 

Reinsurance is deducted from the amount of the premium collected from the transaction and cannot be billed in addition to the premiums that we have on file for the state. The portion that contributed by the agent is combined with our contribution toward the premium for the additional coverage. 

About Attorneys Title Guaranty Fund, Inc.

Founded in 1960, ATGF provides best in class title insurance underwriting and services for more than 60 years. The company's mission is helping agents succeed through trusted products and services, innovative technology and amazing support. The company currently pursues this mission by underwriting, training and supporting agents in Colorado, Utah, Minnesota, North Dakota, Nevada, and Arizona.  ATGF has maintained a strong Financial Stability Rating(r) (FSR) of A, Exceptional, from the independent rating agency, Demotech, Inc.