Page 259 - Misc Ebook IC 78

Miscellaneous Insurance

on his own account is called retention of the insurer
with respect to the risk.

The factors which govern the determination of this
limit are:
(a) the nature of risk
(b) location of the risk
(c) nature of the perils covered
(d) the insurer's capacity to bear the loss to bear the

loss without disturbing his finances and
(e) whether the number of risks identical to the risk

under consideration is sufficiently large to play the
law of large numbers.

Q7.b) What are the main features of the
proportional Treaty Re-insurance.

Ans. Proportional Treaty Reinsurance - This treaty is
transacted according to the following types :
(a) Quota share basis - Under the quota share treaty
the risks are shared by the ceding company and its
reinsurers in some predetermined proportion.
Administration of the submitting accounts involve

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