Page 60 - Reinsurance Management IC85

Reinsurance Management

Q. a. Explain the general provisions of the
b. Reinstatement Clause under an XL
treaty,
Ans: a. Calculate reinstatement premium
i. payable.
XL cover Rs.20,00,000 in excess of
Rs.10,00,000 with provisions for 2
reinstatements at 50% of final earned
premium. Final XL premium Rs.80,000
Loss recovered Rs.50,000/-

The reinstatement clause provides :-
The extent of reinstatement expressed as a
multiple of the per loss limit and as an
amount;

ii. Whether the reinstatement is free or subject to
an additional premium;

iii. How such additional premium is to be
calculated;

iv. Whether the reinstatement provisions apply
equally to all classes of business covered by the
treaty.

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