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Stop Loss Contracts

Stop loss contracts are generally underwritten for a 12-month period. Incurred and paid date criteria are conditions of the policy. Claims have to meet both the incurred and paid criteria in order to be covered.

 

There are several types of contracts:

 

Incurred / Paid Basis

 

  • 12/12

                 - Incurred in 12-month contract period and paid in 12-month contract period

                 - Example:

                      Policy Period: 1/1/16 to 12/31/16

                      Incurred Dates: 1/1/16 to 12/31/16

                      Paid Dates: 1/1/16 to 12/31/16

 

  • 12/15*

               - Incurred in 12-month contract period and paid in 15-month contract period

               - *This is a run-out policy

               - Example:

                    Policy Period: 1/1/16 to 12/31/16

                    Incurred Dates: 1/1/16 to 12/31/16

                    Paid Dates: 1/1/16 to 3/31/17

 

Paid Basis

 

  • 15/12**

                - Incurred in 15-month period and paid in 12-month contract period

                - **This is a run-in policy

                - Example:

                       Policy Period: 1/1/16 to 12/31/16

                       Incurred Dates: 10/1/15 to 12/31/16

                       Paid Dates: 1/1/16 to 12/31/16

 

Other forms of run-in and run-out coverage are available.