Page 182 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

surplus treaty.

The salient features found in surplus treaty are :
(i) The scope of the treaty is defined with reference

to the number of lines, the geographical area and
the class of business.

(ii) The liability of the reinsurer shall commence
obligatorily and simultaneously with that of the
ceding insurer as soon as the retention level is
exceeded.

(iii) The ceding insurer is required to record particulars
of all amounts ceded to the reinsurer who is entitled
for inspection.

(iv) All losses which exceeds the reinsurer's agreed
figure are required to be advised to the reinsurers
within a specified period of receipt of information.

(v) All settlements, adjustments and compromises are
binding on the reinsurer, provided the cause of loss
lies well within the scope of the cover.

(vi) Whenever loss attaching to the treaty exceeds an
agreed amount, the ceding company has the right

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