Act-As-One Provision

Insurance companies, in an effort to lessen financial risk, insure their insurance. This is called reinsurance. Multiple reinsurance companies can be involved. When an insurance company uses multiple reinsurers and is forced to make a claim, things can get as complicated as a ball of yarn in a cat kennel.

The Act-As-One Provision forces the multiple reinsurers to act as one entity when dealing with the insured. The provision doesn’t allow reinsurers to slough off their responsibilities to their fellow reinsurers. It simply makes them act as one entity when dealing with an arbitrator.