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Reinsurance Management

claim indemnifiable under the policy. In the event
of any legal proceedings the reinsurers agree to
follow the fortunes of the insurers and shall consider
themselves bound by local laws, precedents and
practices.

c) Hard market: When the market does not have
enough capacity to underwrite all the risks it is
termed as hard market.

Soft market : When the market has enough
capacity to underwrite all the risks on offer it is
termed as hard market.

d) When the risk has been accepted, premium
received by the insurer becomes written premium.
Premium for the expired period is earned
premium.

Eg. If a policy incepts on 1st of January and
company receives a premium of Rs.1200, then
on 31st May:

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