Obligors in Reinsurance

What is an Obligor?

In reinsurance, an obligor refers to the party responsible for fulfilling the obligations of a reinsurance contract. The two types of obligors in reinsurance are admin-obligor and dealer-obligor.

An admin-obligor is the primary insurer or ceding company that enters into a reinsurance contract with a reinsurer to transfer the risk of its policyholders to the reinsurer. The admin-obligor is responsible for administering the policies and collecting premiums from the policyholders. In the event of a claim, the admin-obligor is responsible for investigating and settling the claim, and then seeking reimbursement from the reinsurer.

On the other hand, a dealer-obligor is a third-party administrator or intermediary who is responsible for facilitating the placement of the reinsurance contract between the primary insurer and the reinsurer. The dealer-obligor does not administer the policies or collect premiums, but rather acts as an intermediary between the primary insurer and the reinsurer. In the event of a claim, the dealer-obligor may assist the primary insurer with the claims process, but the primary insurer remains responsible for settling the claim and seeking reimbursement from the reinsurer.

In summary, the key difference between an admin-obligor and a dealer-obligor in reinsurance is that the admin-obligor is the primary insurer or ceding company that administers policies and collects premiums, while the dealer-obligor is a third-party intermediary that facilitates the placement of the reinsurance contract.