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5

Features and operation of

non-proportional

reinsurance treaties

Contents Syllabus learning
outcomes
Learning objectives
Introduction Chapter
Key terms 5
A Main features and operation of non-proportional reinsurance treaties 5.1

B Different bases of cover attachment 5.2
C Premium calculation for non-proportional reinsurance 5.3, 5.4
D Event limits 5.6 Reference copy for CII Face to Face Training
E Reinstatements 5.5
Key points
Question answers
Self-test questions

Learning objectives
After studying this chapter, you should be able to:

• discuss the basic types of non-proportional reinsurance treaties and their uses;
• discuss the advantages and disadvantages of the different types of non-proportional treaties;
• describe the information needed to rate non-proportional reinsurance treaties;
• outline the various definitions of premium income used under non-proportional treaties;
• describe the ways that premiums and claims recoveries are made under non-proportional treaties;
• outline the different ways in which cover can attach under non-proportional treaties;
• describe the significance of ‘event’ in determining how losses are allocated under non-proportional
treaties;
• explain the importance of reinstatements; and
• discuss the use of event limits in non-proportional reinsurance treaties.