Question
ABC Ins Co limited has reinsured its property account as follows 4 gross line 1st surplus treaty with maximum cession of 4,000,000 5 gross line
ABC Ins Co limited has reinsured its property account as follows 4 gross line 1st surplus treaty with maximum cession of 4,000,000 5 gross line 2nd surplus trusty with a maximum cession of 5,000,000 The gross line retention of ABC is scaled in its table of limits according to risk classification from 250,000 to 1,000,000 ABCs gross line retention of a maximum of 1,000,000 is protected by a risk excess of loss treaty of 900,000 each and every loss each risk in excess of the first 100,000 each and every loss each risk Where the risk exceeds ABCs automatic capacity , it places the balance on a proportional facultative reinsurance basis. ABC has accepted the following risks and the retention for each risk is in accordance with its table of limits Risk TSI Gross Retention A 25,000,000 1,000,000 B 5,000,000 750,000 C 5,000,000 250,000 ABC utilized its full Treaty Capacity A) Set out the percentage and amount of each risk ceded to the 1st and 2nd surplus and facultative where required (12 marks) B) Each risk sustain a claim of 4,000,000. What is the recovery from each reinsurer (8 marks )
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started