Licensed For Reinsurance Only

When you think of insurance, you probably think of a company that deals directly with customers. You pay your premium and they provide coverage for your car or your house or whatever.

But there’s another level to the industry. Insurance companies have their own insurance companies. These firms offer what’s called “reinsurance.” They cover other insurance companies, spreading out risk and providing backup.

The insurance industry is highly regulated: lots of government agencies looking over the situation, with layers of rules and licenses. Some firms can provide both consumer insurance and reinsurance. Others only qualify for reinsurance. These firms are known as “Licensed For Reinsurance Only.”