Page 56 - Reinsurance Management IC85
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Reinsurance Management
Q a. Describe the normal method of
terminating a continuing treaty.
b. Under what circumstances a treaty
agreement are automatically terminated?
a. Normally the termination clause under a treaty
provides for either party to terminate it as at 31st
Dec. in any year by giving not less than 90 days
previous notice in writing. Sometimes, the practice
is to subject the treaty Notice of Cancellation at
Anniversary Date (NCAD).
This method is useful to the reinsurer and saves
the trouble of observing the notice period. It is a
common practice among reinsurers to send
provisional notice of cancellation pending review
of treaty and renewal thereof. Normally, it is agreed
that notice will be in writing by registered post,
telex or telegram.
b. Treaties may contain provisions for automatic
cancellation in following circumstances :-
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