Page 216 - Reinsurance Management IC85

The Insurance Times

Q1. Distinguish between :

a) Treaty and facultative methods of

Reinsurance

b) Claims control and claims co-operation

c) Hard and Soft markets

d) Written and Earned premium.

Ans: a) Treaty
Facultative

Each and every risk is Risk featuring in the
individually ascertained. portfolio insured will

automatically reinsured.

Facultative reinsurance Large volumes of
will increase the comp- premium are ceded
etitive edge of the insurer. away.
Reinsurer can negotiate Premium will be part of
suitable premium. overall portfolio of risks.

There is freedom to It is an obligatory to
offer risk. cede all risks in the
portfolio.

Each risk is individually All risks will not be
negotiated. qualified into the treaty
as treaty has certain
risks excluded.

Website: www.bimabazaar.com Call: 033-22184184 / 40078428 214

ight@ The Insurance Times. 09883398055 / 0988338