1.Assume that Apex Fire Insurance and Geneva Re enter into a quota-share arrangement by which losses and premiums are shared 50-50 and a $100,000 loss occurs.

2.Assume that Apex Fire Insurance and Geneva Re enter a surplus-share treaty. Apex Fire Insurance has a retention limit of $200,000 (called a line) for a single policy, and that four lines, or $800,000, can be ceded to Geneva Re. Assume that a $500,000 property insurance policy is issued, and a $100,000 loss occurs.

3.In the second scenario, what if it is a excess-of-loss treaty instead of a surplus-share one?