Page 97 - Reinsurance Management IC85

The Insurance Times

assumptions made at the time of acceptance,
regarding GNPI, exposures involved, adequacy of
rate etc.

Q. Discuss the distinguishing features of
proportional treaty accounts.

Ans: The majority of the present day proportional treaties
are "blind". It is the responsibility of the ceding company
which possesses all information to prepare and furnish
accounts to reinsurers periodically showing premiums,
claims paid, reserves released and retained etc. as per
provisions of the concerned treaty.

Treaty terms stipulate the periodicity at which accounts
will be rendered by the ceding company. In practice,
it is seen that furnishing accounts quarterly is
advantageous for the following reasons :-

i. The reinsurer is able to watch the trend of
business.

ii. The settlement of balances is not unduly delayed,
affecting investment income of reinsurers and

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