Page 155 - Reinsurance Management IC85

Reinsurance Management

e) Claims made basis: “losses discovered basis”
- claims will be paid on claims made basis and
loss occurring basis. Occupational disease
claims, product liability claims and fidelity
claims to say few are settled on claims made
basis.

f) Unearned premium reserve: An amount set
aside in the accounts of an insurer or reinsurer
that represents the amount of premium applicable
to the unexpired portion of the policy. This may
be requirement of the regulator to protect the
insurer against insolvency or reinsurer for any
reason unable to pay claims. The reinsurer
receives interest on the reserve and released at
the end of the treaty year.

g) Risk based capital: the name given to a number
of mathematical modeling techniques used for
calculating the capital that an insurer should
allocate to each of its component businesses or
product lines.

Sashi Publications - www.sashipublications.com 153

ight@ The Insurance Times. 09883398055 / 0988338