Page 189 - Fire Insurance Ebook IC 57

The Insurance Times

annually by GIC in consultation with the four
subsidiary companies and finally approved by the
Govt Of India. The objective is to maximize retention
within the country to save foreign exchange outgo.
To achieve this the following steps are adopted :
i) Fire reinsurance in India is underwritten on PML

basis, which means retention limits are decided
based on PML of a risk and simple risk based on
sum insured.

ii) Quota share cessions of all the businesses written
by any company is ceded to GIC. This is a
statutory requirement and hence are called
obligatory cessions. This is retained entirely within
the country and protected by Excess of Loss
Cover.

iii) The surplus after the obligatory cessions is dealt
with depending on sum insured and PML. For this
purpose , risks are classified into non-risk booked,
risk booked and listed risks.

iv) The surplus after obligatory sessions in non risk
booked portfolio is entirely retained by the insurers

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