Page 71 - Reinsurance Management IC85
P. 71
The Insurance Times
York, 82, held that "there is nothing in the
law which forbids drafting reinsurance
agreements in special terms so that they will
operate in favour of the original insured".
Q. a. Explain what is the subject- matter of an
insurance contract.
b. Discuss the position of reinsurer's claim
payments in the event of reinsured's
insolvency.
Ans: a. Reinsurance is an insurance, by an insurer, of the
original subject matter of insurance (Mckenzie Vs.
Whitworth, 1875). From the above, it may be
summarised, in general as,
i. In facultative reinsurances, the subject matter
of reinsurance, will be the subject-matter of
original policy.
ii. in non-proportional treaties, it is the cedent's
liability under an original policy,
iii. in proportional reinsurances, it may be either
of the two stated above.
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