True or False: Stop Loss Reinsurance is a type of reinsurance that reimburses the ceding company when specific class losses exceed a certain ratio.

Stop Loss Reinsurance is indeed a type of reinsurance that provides coverage when a ceding company experiences losses that exceed a predefined threshold or ratio. This mechanism is designed to protect the insurer from significant losses that could impact its financial stability. The reinsurance reimburses the ceding company for amounts lost over this limit, thereby giving the insurer a safety net against unusually high claims.

The premise of Stop Loss Reinsurance is particularly useful because it helps insurers manage their risk and stabilize their financial results, especially when they encounter claims that surpass expected levels. This type of coverage is applicable across various lines of insurance, not limited to health or property insurance. Thus, stating that it is true that Stop Loss Reinsurance reimburses based on losses exceeding a certain ratio accurately reflects its functionality and purpose in the reinsurance framework.