Delta Insurance is a property insurer that enters into a surplus-share reinsurance treaty with Eversafe Re. Delta has a retention limit of $200,000 on any single building, and up to nine lines of insurance may be ceded to Eversafe. A building valued at $1,600,000 is insured with Delta. Shortly after the policy was is- sued, a severe windstorm caused a $800,000 loss to the building.

a. How much of the loss will Delta pay?

b. How much of the loss will Eversafe pay?

c. What is the maximum amount of insurance that Delta can write on a single building? Explain your answer.