Page 48 - Reinsurance Management IC85

Reinsurance Management

This is also known as buffer excess of loss
covers. In this type of arrangement, the ceding
company agrees to have a voluntary excess
in aggregate per underwriting year over and
above the net retained amount under the
treaty.

The advantage is that the reinsured is able to obtain
an economical rate because there will be saving
on the loading (for determining loaded burning cost)
in respect of the additional amount he bears for
his own account.

d. Top and Drop Cover:
This is a form of additional excess of loss
protection arranged over and above the main
excess of los programme in large valued risks
like oil rigs etc.

Suppose, the main treaty for oil rigs provides
for a total line say Rs.40 crores in excess of
Rs.4 crores in 4 layers, an additional "top and

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