Page 19 - Reinsurance Management IC85

The Insurance Times

a. Where the company places business on
facultative basis in order to limit exposure to
its treaties,

b. Priority cessions which are automatic and placed
with a company belonging to the same group,

c. Priority cessions which are obligating by law or
government order.

Advantages
a. This arrangement helps in increasing the local

market retention,
b. This helps in strengthening the discipline of a

market.

Q. What is the objective of reinsurance
accounting ? In what way is it different from
other accounting ?

Ans: The objective of the reinsurance accounting is
to record the business, control the funds and maintain
proper books and records for the benefit and
information of all stakeholders both internal and
external.

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