Legal Definitions - bordereau

A bordereau is a detailed report, most commonly used in the insurance industry, specifically in the context of reinsurance. It is a document that an insurance company (known as the "cedent") provides to its reinsurer. This report lists the individual insurance policies or risks that the cedent has decided to "cede" or transfer to the reinsurer. It includes essential information about these risks, such as the names of the original policyholders, the types of coverage provided, the policy effective dates, and any claims or losses that have occurred. The purpose of a bordereau is to give the reinsurer a clear and regular overview of the specific risks it has agreed to cover, allowing it to manage its own exposure and calculate premiums.

• Example 1: Reporting a Portfolio of Home Insurance Policies

  A regional insurance company, "SafeHome Insurance," underwrites thousands of home insurance policies. To manage its risk exposure, SafeHome Insurance has a reinsurance agreement with "Global Reinsurers Inc." Every quarter, SafeHome Insurance compiles a bordereau. This report lists all the new home insurance policies it has issued, details about the properties insured (e.g., location, value), the coverage limits, and any claims filed on existing policies that fall under the reinsurance agreement. This allows Global Reinsurers Inc. to see exactly which homes they are now partially responsible for insuring and to track their potential liabilities.

• Example 2: Tracking Specialized Event Cancellation Risks

  An insurance provider, "EventGuard," specializes in offering insurance for large-scale events like music festivals, sports tournaments, and conferences, covering risks such as cancellation due to unforeseen circumstances. EventGuard has a reinsurance treaty with "RiskShield Reinsurance." Monthly, EventGuard sends a bordereau to RiskShield. This document itemizes each event policy that EventGuard has written, including the event dates, the insured value, the specific perils covered (e.g., severe weather, venue damage), and any reported incidents or potential claims. This detailed report enables RiskShield Reinsurance to monitor its exposure to these unique and potentially high-value event risks.

• Example 3: Updating on Commercial Property Risks

  A commercial insurance broker, "BusinessSure," places policies for various businesses, including large commercial properties like office buildings and factories. BusinessSure has a standing agreement with "Capital Re," a reinsurer, to share certain high-value property risks. Periodically, BusinessSure prepares a bordereau for Capital Re. This report contains a list of all commercial properties whose insurance policies have been partially reinsured by Capital Re, detailing the property addresses, their insured values, the types of businesses operating within them, and any significant changes to the policies or reported losses. This ensures Capital Re has up-to-date information on the commercial property portfolio it is backing.