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v. Pool may arrange for an excess of loss cover
to protect the whole pool by limiting the net
loss potential.
vi. The administrative costs of the pool are met by
member companies either by specific periodic
charge or by way of an overriding commission on
retroceded business.
Q. What are the common characteristics of non-
proportional reinsurance covers which
distinguish them from proportional treaties?
a. In non-proportional covers the distribution is based
on losses rather than sums insured. Reinsurer
receives a percentage of original premiums and
not a proportion of premium corresponding to sum
reinsured.
b. There are no individual cessions.
c. Accounting operations are kept to a minimum with
substantial saving in administrative costs,
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