Page 260 - Misc Ebook IC 78

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pro-rata cessions of premium and pro-rata
recoveries on claims.

(b) Surplus basis - Under the surplus treaty, the
ceding company reinsures the surpluses over and
above its retention in terms, and within the size
of the treaty. The size or capacity of the treaty is
expressed in integral multiples of the ceding
company's retention.

There may be more than one surplus treaty,
depending on the size of the risks the ceding
company may have and the facility that they may
require. These treaties are known as First Surplus,
Second Surplus, Third Surplus and so on.

Administration of the accounts is on the basis
premium or claim bordereaux which are detailed
item-wise statements of cessions and claims. In
addition, there are commissions recoverable from
the treaty reinsurances.

(c) Pool basis - 256

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