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RATING EXPERIENCE - A quantitative measure used to determine how much a given policy should cost, calculated using historical data to determine the risk of future claims.

RECIPROCAL INSURANCE - Protects against loss in which individuals or entities agree to indemnify each other against specified kinds of losses via a mutual exchange or insurance contracts.

RECIPROCAL INSURER - An unincorporated group facilitating an exchange of insurance contracts, managed by an attorney-in-fact. Equivalent to the insurance company in a stock or mutual format.

REINSURANCE - An insurance company’s ability to protect itself against the risk of losses with other insurance companies. Individuals and corporations obtain insurance policies to provide protection for various risks.

RESERVE - An insurers actuarially determined estimate of its liability for all unpaid claims. This estimate includes reported losses that have not yet been paid, as well as incurred but not reported losses. (IBNR)

RISK MANAGEMENT - The recognition of risk, risk assessment, developing strategies to manage it and mitigation of risk using managerial resources. Strategies include transferring risk to another party, avoiding the risk, reducing the negative effect of the risk and accepting some or all of the consequences of a particular risk.

RISK PURCHASING GROUP (RPG) - Distinctive insured’s concurrently purchasing liability insurance pursuant to the terms of the federal Risk Retention Act of 1986.

RISK RETENTION GROUP (RRG) - An owner controlled insurance company authorized by the Federal Liability Risk Retention Act of 1986.