Page 242 - Reinsurance Management IC85

The Insurance Times

Q.1 Elaborate -
a) Reinstatement
b) Umbrella cover
c) Stop loss reinsurance
d) Cash Call facility

Ans: a) Reinstatement - reinstatement clause determines
the number of times the contract can incur losses.
By paying an extra premium the cover can be
reinstated back to the proportion of loss suffered.
The purpose of the clause to limit maximum times
the treaty can be made to pay for looses.

Eg. If the reinstatement clause limit the
reinstatement to 4 times that means the contract
will cover for 5 total losses.

b) Umbrella cover : Protection for all classes of
business including automobile, fire, general liability,
homeowners, multiple peril, burglary, and glass, by
combining the contracts for these classes of
business into one reinsurance contract. This
enables the cedant to obtain reinsurance more

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