Page 154 - Reinsurance Management IC85

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b) Cash loss : usually claims are settled at the end
of the quarter by balance of payments (incoming
premium deposit will be reduced by amount of
claim amount to be paid by the reinsurer for the
previous quarter). But for certain large losses the
reinsured will request the reinsurer to settle such
loss by cash settlement. Immediate amount will
be credited to reinsured account and will be
adjusted in quarterly account as credit given to
reinsured.

c) 72 hours clause: this helps reinsured to claims
for all losses by same insured event within the
specified 72 hours. Starting of the 72 hours time
is at the discretion of the reinsured but should
not be before the date and time of the first loss
resulting from the insured event.

d) Acquisition cost : the ceding insurer incurs
considerable expenses in obtaining his business
e.g. in prospecting, issuing of policies and in
adjustment of claims.

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