The table below shows parts of an arrangement for a non-proportional reinsurance contract. Based on the following
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Question:
The table below shows parts of an arrangement for a non-proportional reinsurance contract. Based on the following information, answers the questions.
Policy | Original S.I | Loss |
Client 1 | $1,000,000 | 25% |
Client 2 | $1,000,000 | 20% |
Client 3 | $1,500,000 | 35% |
- What is the meaning of “$750,000 XS $250,000”?
- Will cedent be indemnified under a $750,000 XS $250,000 Working XS? Why? How much? (Use Table to show your calculations).
Policy | Original S.I | Loss | Cedant $$ | Reinsurer $$ |
- Given the same example, will there be any differences in your answer if the treaty is specified as $750,000 XS $250,000 Cat XS and the losses are caused
- by an earthquake? Use table to show your calculations if there are differences in your answer.
Policy | Original S.I | Loss | Cedant $$ | Reinsurer $$ |
- Assume there is only 1 loss due to the earthquake – an 80% loss suffered by Client 3. The contract is $750,000 XS $250,000 Cat XS. Will cedent be indemnified? How much? [2 marks]
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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