Fronting

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Fronting is when the ceding company (insurer) underwrites a policy and transfers the entire risk to a reinsurer. The company that underwrites the initial policy is the fronting company and receives a portion of the premium, despite ceding the entirety of the risk to the reinsurer. Since the ceding company originally issued the policy it appears to be the insurer, however, the reinsurer is now responsible for ensuring all claims are payed against the policy.

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