Page 74 - Liability Insurance IC74

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under other reinsurance arrangements prior to and for
the benefit of the excess of loss treaty.

The rate of premium is arrived at on the basis of past
loss experience of the business. The prospect premium
of the ceding for a definite period is divided by the cost
of all claims which are in excess of the amount of the
underlying limits. This gives the burning cost of the
business. The burning cost expressed in terms of
percentage produces the pure premium which is loaded
by some proportion to provide a margin for reinsurer's
expenses, profits and possible deterioration of claim
experience.

Q10. What is the information required in the proposal
Ans. form for workmen's compensation insurance
policy?
The following informations are required in the proposal
form for workmen's compensation insurance policy :
(i) the name and business address of the proposer.

(ii) full particulars of the proposer's trade or occupation
with precise description of the work.

(iii) the Schedule of employees, showing the estimated
number and the estimated annual wages, salaries

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