Page 176 - Reinsurance Management IC85

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b) Surplus Treaty
Quota Share Treaty Will be lesser than quota
Commission will be share.
higher. Lesser amount of
All risks have to be income is ceded as risk
transferred hence large retained is higher.
amounts of income are
ceded away. Surplus treaty is for
New insurers with low insurers with sufficient
capital take advantage capital base as insurer is
of reinsurer's capital retaining larger volumes
and expertise. of risks.
Reinsured can vary
Rigid form of treaty.
retention upon a Results are usually
fluctuating.
particular risk. As retentions vary for
Stable form of results different risks, reporting
for reinsurer. is not as simple as quota
Accounting and share treaty.
reporting is simpler.

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