Page 263 - Reinsurance Management IC85

Reinsurance Management

burden of a surplus would be too great. It is a
preferred form for retrocession of reinsurance
accounts

Variable Quota Share Treaty : This is a treaty
where the amount reinsured is expressed as being
between a minimum (say 20%) and maximum
(say 80%) quota share. Although it is said to
be a quota share it has all the characteristics
of a surplus.

Facultative: A considerable proportion of peak
risks business is placed facultatively. This
enables direct insurers to produce a more
balanced book of business for themselves and
for their treaty reinsurers. A Risk Excess cover
operates similar to a facultative but on non-
proportional basis.

Facultative Obligatory Treaty : This a rare
form .and was in use previously. This can be
placed in weak reinsurance market conditions and

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