7 After reading this question fill in relevant cells in Sheet 2 of the excel spreadsheet Read the description of surplus share treaty and quota share treaty in the Introduction to reinsurance by Swiss Re In particular, read starting page 22 (24 out of 52), the section titled, Basic Forms of Reinsurance This question is related to Surplus reinsurance Beyond the insurer's retention Glassboro Insurance Company has a surplus share treaty with Waterford Re, a reinsurer and retains a line of $25,000 The treaty contains nine lines and provides for a maximum cession of $225,000 Therefore, the retention and reinsurance provide Glassboro Insurance with the ability to issue policies with amounts of insurance as high as $250,000 The following three policies are issued by Glassboro Insurance Company and are subject to the surplus share treaty with Waterford Re, the reinsurer Policy A insures Building A for $25,000 for a premium of $400, with one loss of $8,000 Policy B insures Building B for $100,000 for a premium of $1,000, with one loss of $10,000 Policy C insures Building C for $150,000 for a premium of $1,500, with one loss of $60,000 Extra credit Policy D insures Building D for $300,000 for a premium of $8,000 with one loss of $100,000 Glassboro Insurance Company Retains Waterford Re The Reinsurance Co Total Policy A Amount of Insurance Percentage of insurance allocated Premiums Losses 0 00 25,000 100 400 8,000 Policy B Amount of Insurance Percentage of insurance allocated Premiums Losses 0 00 100,000 100 1000 10,000 Policy C Amount of Insurance Percentage of insurance allocated Premiums Losses 0 00 150,000 100 1500 60,000 Policy D Amount of Insurance Percentage of insurance allocated Premiums Losses 0 00 300,000 100 8000 100,000 Glassboro Insurance Company Retains Waterford Re The Reinsurance Co Total Policy A Amount of Insurance Percentage of insurance allocated Premiums Losses 0 00 25,000 100 400 8,000 Policy B Amount of Insurance Percentage of insurance allocated Premiums Losses 0 00 100,000 100 1000 10,000 Policy C Amount of Insurance Percentage of insurance allocated Premiums Losses 0 00 150,000 100 1500 60,000 Policy D Amount of Insurance Percentage of insurance allocated Premiums Losses 0 00 300,000 100 8000 100,000

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7. After reading this question fill in relevant cells in Sheet 2 of the excel spreadsheet. Read the description of surplus share treaty and quota

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7. After reading this question fill in relevant cells in Sheet 2 of the excel spreadsheet. Read the description of surplus share treaty and quota share treaty in the Introduction to reinsurance by Swiss Re. In particular, read starting page 22 (24 out of 52), the section titled, "Basic Forms of Reinsurance" This question is related to Surplus reinsurance: Beyond the insurer's retention

Glassboro Insurance Company has a surplus share treaty with Waterford Re, a reinsurer and retains a line of $25,000. The treaty contains nine lines and provides for a maximum cession of $225,000. Therefore, the retention and reinsurance provide Glassboro Insurance with the ability to issue policies with amounts of insurance as high as $250,000. The following three policies are issued by Glassboro Insurance Company and are subject to the surplus share treaty with Waterford Re, the reinsurer.

Policy A insures Building A for $25,000 for a premium of $400, with one loss of $8,000.
Policy B insures Building B for $100,000 for a premium of $1,000, with one loss of $10,000.
Policy C insures Building C for $150,000 for a premium of $1,500, with one loss of $60,000
Extra credit: Policy D insures Building D for $300,000 for a premium of $8,000 with one loss of $100,000

Glassboro Insurance Company Retains Waterford Re - The Reinsurance Co Total Policy A Amount of Insurance Percentage of insurance allocated Premiums Losses 0.00% 25,000 100% 400 8,000 Policy B Amount of Insurance Percentage of insurance allocated Premiums Losses 0.00% 100,000 100% 1000 10,000 Policy C Amount of Insurance Percentage of insurance allocated Premiums Losses 0.00% 150,000 100% 1500 60,000 Policy D Amount of Insurance Percentage of insurance allocated Premiums Losses 0.00% 300,000 100% 8000 100,000 Glassboro Insurance Company Retains Waterford Re - The Reinsurance Co Total Policy A Amount of Insurance Percentage of insurance allocated Premiums Losses 0.00% 25,000 100% 400 8,000 Policy B Amount of Insurance Percentage of insurance allocated Premiums Losses 0.00% 100,000 100% 1000 10,000 Policy C Amount of Insurance Percentage of insurance allocated Premiums Losses 0.00% 150,000 100% 1500 60,000 Policy D Amount of Insurance Percentage of insurance allocated Premiums Losses 0.00% 300,000 100% 8000 100,000