Question: D etermine the below amounts under a pro rata quota & surplus share reinsurance contract using the following scenario s . ABC Insurance has a

Determine the below amounts under a pro rata quota & surplus share reinsurance contract using the following scenarios.

ABC Insurance has a quota share treaty with XYZ Reinsurer. The treaty has a $500,000 limit, a retention of 40% and a cession of 60%.

ABC Insurance has a surplus share treaty with XYZ Reinsurer and retains a line of $35,000. The treaty contains a maximum cession of $250,000.

Policy insures a building for $150,000 for a premium of $2,000, with one loss of $10,000.

Pro Rata Quota Share

ABC Insurance

XYZ Reinsurer

Total

Amounts of Insurance

Premiums

Losses

Pro Rata Surplus Share

ABC Insurance

XYZ Reinsurer

Total

Amounts of Insurance

Premiums

Losses

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!