Page 315 - Reinsurance Management IC85

The Insurance Times

uncertainty and expense of individual facultative
solutions.

Also, they can be used to ensure that an insurer can
achieve sufficiently high acceptance limits on target
risks, and to limit risks with high degrees of hazard.

Q7. Explain three different bases upon which
the period of a non-proportional contract
may be based.

Ans: u Risk attaching basis - whereby for the period
of the contract, risks attach throughout the year
and any losses which occur are covered,
whenever they occur.

u Losses occurring basis - whereby regardless of
when the original policies incept, provided the
losses occur during the period of reinsurance
cover, then they are recoverable.

u Losses discovered/claims made - whereby
coverage is given based on the date the claim is

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