12. The insurer operates under the obligatory reinsurance programme with the ceiling amount of 80 million....

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12. The insurer operates under the obligatory reinsurance programme with the ceiling amount of 80 million. The programme combines in a hierarchical order three types of cover: Quota Share at the bottom, then Surplus and the Excess of Loss on the top. The Surplus secures retention left after Quota Share and the Excess of Loss secures retention left after the Surplus. Below are details on each type of cover: a)Quota Share 40% b) Surplus Z=3 million; L-4 lines of cover c) 3 million XL over 15 million Calculate the cedant's share in the claim of 50 million from the policy with the insured sum of 50 million 12. The insurer operates under the obligatory reinsurance programme with the ceiling amount of 80 million. The programme combines in a hierarchical order three types of cover: Quota Share at the bottom, then Surplus and the Excess of Loss on the top. The Surplus secures retention left after Quota Share and the Excess of Loss secures retention left after the Surplus. Below are details on each type of cover: a)Quota Share 40% b) Surplus Z=3 million; L-4 lines of cover c) 3 million XL over 15 million Calculate the cedant's share in the claim of 50 million from the policy with the insured sum of 50 million

Answer rating: 100% (QA)

To calculate the cedants share in the claim we need to follow the hierarchical order of the reinsurance program and calculate the amount covered by ea... View the full answer