Page 110 - Reinsurance Management IC85

Reinsurance Management

proportional treaty), as soon as losses exceed
the retention, intimation is given and the
reinsurer pays on being given proof of
settlement, which is simply a statement of
losses paid by the primary insurer, together with
estimates of current reserves. Here the liability
of the reinsurer is in excess of cedant's loss
retention.

iii) In the case of aggregate excess loss treaties
(these are non-proportional treaties), the
reinsurers are known to make initial payments
say sixty days after the end of the accounting
year.

If it is clear that the losses will exceed the
retention, then payments may be made before
the end of the year. The liability is negotiated
on rate exposure; there is no commission.
Premium is minimum.

Q. Distinguish between Co-insurance and

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