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Reinsurance Management

alterations in the agreement to be made through
an addendum or by letters exchanged by the
parties. This clause is binding on both the parties.

b. Set off clause: This clause provides for either
party of the treaty to deduct from any payments
due to the other party any amounts owed to them
by the other party under the treaty or any other
treaty or treaties.

Q. Outline the procedure followed in stamping
and execution of treaty agreements.

Ans: As per the Indian Stamp Act, it is obligatory to stamp
a document executed in India. The procedure
followed is:
a. For an inward treaty: Before execution of the
agreement one copy is forwarded to the Stamp
Office and stamped with Rs.5/- special adhesive
stamp. Both copies are then signed, the
unstamped copy is returned to the ceding
company and stamped copy retained with the
reinsurer in India.

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