{
  "id": "clause-premium-reserve-clause",
  "type": "clause",
  "languages": {
    "en": {
      "id": "clause-premium-reserve-clause",
      "lang": "en",
      "type": "clause",
      "title": "Premium Reserve Clause",
      "shortDefinition": "The premium reserve clause allows the reinsurer to withhold part of the reinsurance premium as a security reserve until the final loss experience of the treaty year is known.",
      "synonyms": [
        "Premium withholding clause"
      ],
      "linesOfBusiness": [
        "Reinsurance"
      ],
      "jurisdictions": [
        "Global"
      ],
      "tags": [
        "Reinsurance",
        "Premium structuring"
      ],
      "relations": {
        "relatedTerms": [
          "term-proportionale-rueckversicherung",
          "term-facultative-reinsurance"
        ],
        "partOf": [],
        "appliesTo": [
          "term-proportionale-rueckversicherung",
          "term-facultative-reinsurance"
        ],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": {
        "kind": "premium",
        "origin": "reinsurance-market",
        "favours": "insurer",
        "negotiability": "negotiable",
        "standardWordings": []
      },
      "legalBasis": [],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-09-03",
      "generated": {
        "by": "cursor-agent/claude-sonnet-5",
        "at": "2026-09-03T00:00:00.000Z"
      },
      "verified": [
        {
          "by": "human:ghesse",
          "at": "2026-09-04T00:00:00.000Z",
          "method": null
        }
      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/en/knowledge/clause/premium-reserve-clause/",
      "alternateUrl": "https://hgh.ch/lexikon/de/wissen/klausel/premium-reserve-klausel/",
      "body": "## Purpose\n\nUnder proportional and facultative treaties, premium is often settled in advance, while the actual loss burden only develops over subsequent years. The premium reserve clause gives the reinsurer the right to withhold an agreed percentage of gross premium as an interest-bearing reserve, instead of paying it out in full to the cedent or its reinsurance intermediary.\n\n## Effect and limits\n\nThe withheld reserve serves as security for future claims payments and is usually released in instalments over subsequent accounting periods as loss development stabilises. It is not a full substitute for a deposit or letter of credit but can substantially reduce the reinsurer's counterparty risk vis-à-vis a financially weaker cedent.\n\n## Negotiation and practice\n\nThe level of the withholding, the interest credited on the reserve, and the release schedule over several years are the main negotiation points. For facultative single risks with high volatility, the clause is a common instrument for protecting the reinsurer."
    },
    "de": {
      "id": "clause-premium-reserve-clause",
      "lang": "de",
      "type": "clause",
      "title": "Premium-Reserve-Klausel",
      "shortDefinition": "Die Premium-Reserve-Klausel erlaubt es dem Rückversicherer, einen Teil der Rückversicherungsprämie als Sicherheitsreserve einzubehalten, bis die endgültige Schadenerfahrung des Vertragsjahrs feststeht.",
      "synonyms": [
        "Prämieneinbehalt"
      ],
      "linesOfBusiness": [
        "Rückversicherung"
      ],
      "jurisdictions": [
        "Global"
      ],
      "tags": [
        "Rückversicherung",
        "Prämiengestaltung"
      ],
      "relations": {
        "relatedTerms": [
          "term-proportionale-rueckversicherung",
          "term-facultative-reinsurance"
        ],
        "partOf": [],
        "appliesTo": [
          "term-proportionale-rueckversicherung",
          "term-facultative-reinsurance"
        ],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": {
        "kind": "premium",
        "origin": "reinsurance-market",
        "favours": "insurer",
        "negotiability": "negotiable",
        "standardWordings": []
      },
      "legalBasis": [],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-09-03",
      "generated": {
        "by": "cursor-agent/claude-sonnet-5",
        "at": "2026-09-03T00:00:00.000Z"
      },
      "verified": [
        {
          "by": "human:ghesse",
          "at": "2026-09-04T00:00:00.000Z",
          "method": null
        }
      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/de/wissen/klausel/premium-reserve-klausel/",
      "alternateUrl": "https://hgh.ch/lexikon/en/knowledge/clause/premium-reserve-clause/",
      "body": "## Zweck\n\nBei proportionalen und fakultativen Verträgen wird die Prämie oft im Voraus abgerechnet, während sich die tatsächliche Schadenlast erst über Jahre entwickelt. Die Premium-Reserve-Klausel gibt dem Rückversicherer das Recht, einen vereinbarten Prozentsatz der Bruttoprämie als verzinsliche Reserve zurückzubehalten, statt sie vollständig an den Zedenten oder dessen Rückversicherungsvermittler auszuzahlen.\n\n## Wirkung und Grenzen\n\nDie zurückbehaltene Reserve dient als Sicherheit für künftige Schadenzahlungen und wird üblicherweise in den folgenden Abrechnungsperioden anteilig freigegeben, sobald sich die Schadenentwicklung stabilisiert. Sie ersetzt keine Kaution oder Letter of Credit vollständig, kann aber das Gegenparteirisiko des Rückversicherers gegenüber einem finanzschwächeren Zedenten deutlich reduzieren.\n\n## Verhandlung und Praxis\n\nHöhe des Einbehalts, Verzinsung der Reserve und der Freigabeplan über mehrere Jahre sind die wesentlichen Verhandlungspunkte. Bei fakultativen Einzelrisiken mit hoher Volatilität ist die Klausel ein gängiges Instrument zur Absicherung des Rückversicherers."
    }
  }
}