What term is used when a reinsurance company has full control over decision-making on claims?

The term related to a reinsurance company having complete authority over decision-making regarding claims is known as a claims control clause. This clause is vital in the context of reinsurance because it delineates the extent to which the reinsurer can dictate the terms under which claims are managed, including how investigations are conducted and how settlements are approached.

When this clause is in place, the reinsurer typically has the power to make key decisions independently, which can affect the handling of the claim and the potential financial outcomes for both the insurer and reinsurer. This authority is particularly important in situations where the primary insurer might have conflicting interests or may not have the same level of expertise in handling complex claims as the reinsurer.

Understanding this concept is essential in the insurance industry, especially for professionals working with reinsurance agreements, as it emphasizes the relationship dynamics and responsibilities between parties involved.