Page 6 - Reinsurance Management IC85

Reinsurance Management

Important Questions and Answers

Q. Define the following:

a. Reinsurance Treaty:
An agreement made between the direct insurer
and the reinsurer under which the former agrees
to cede obligatorily a portion of risks upto an
agreed limit to the reinsurer who in turn agrees to
accept such cessions.

b. Slip:
A document showing details of reinsurance
proposed which is circulated to the reinsurers by
the brokers/ ceding company.

c. Line:
'Line' is the amount of retention of the direct
insurer. Retention is the amount of liability the
ceding company keeps for its account on a risk.
A reinsurer may accept one or more lines or a
fraction of a line.

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