There are different types of treaty reinsurance. The arrangement between insurer and reinsurer for some types of treaty reinsurance agreements are as follows: Excess of Loss Treaty Reinsurance Arrangement: Direct insurer
CS Professional · Insurance - Law & Practice · PYQS · December 2022
There are different types of treaty reinsurance. The arrangement between insurer and reinsurer for some types of treaty reinsurance agreements are as follows: Excess of Loss Treaty Reinsurance Arrangement: Direct insurer decision to loss bearing is up to ₹1,00,000 in each and every loss The arrangement with the insurer is the loss amount beyond ₹1,00,000 with an upper limit of ₹80,000 The actual loss is ₹2,00,000 Calculate the appropriate amount of loss bearing for direct insurer and reinsurer for all the above treaty arrangements and fill the following table with the amounts shared by the direct insurer and the reinsurer.
Answer & Explanation:
Shares of Amount in ₹ 3. Excess of Loss Treaty Reinsurance Arrangement Direct Insurer 1,00,000 Upper limit 80,000 Reinsurer 80,000 Actual loss of ₹2 lakh - upper limit ₹80,000 - Direct insurance bears 20,000 Total amount for direct insurer is ₹1,00,000 plus (+) residue loss of ₹20,000 which is not borne by reinsurer 1,20,000 Total ₹1,20,000 by direct insurer plus (+) ₹80,000 by reinsurer 2,00,000
Topics: Reinsurance
Related Questions in this Topic
- Discuss the role of reinsurance as a risk transfer technique within the broader context of Enterprise Risk Management (E...
- What is Reinsurance? How is Reinsurance controlled by IRDAI?
- There are different types of treaty reinsurance. The arrangement between insurer and reinsurer for some types of treaty ...
- There are different types of treaty reinsurance. The arrangement between insurer and reinsurer for some types of treaty ...
- There are different types of treaty reinsurance. The arrangement between insurer and reinsurer for some types of treaty ...