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considerable administrative work. Any
premium reserves withheld are also released
simultaneously with portfolio withdrawal and
the reserve corresponding to the premium of
the previous year is withheld in the first
accountof the next year.
c) Line: insurance company’s gross retention on the
original risk is termed as line. Surplus treaty as
usually a specified multiple of line.
d) Securitization: capacity constrains in catastrophe
market can be overcome by securitizing
catastrophe risk portfolios and place them direct
with investors in the form of securities.
Policyholders can have comfort by way of
removing credit risk since capital is made available
before the loss occurs and for investors it gives
a chance of a higher coupon rate.
Q3. a) The reinsurance scenario in India Post
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