Reinsurance Assignment (Show your calculation) 1. Assume a pro rata treaty reinsurance agreement with 35% retention. Further assume a primary insurance contract with limits of $2,500,000, premiums of $20,000 and deductible $10,000 fall within the treaty's definition. a) If a loss of $80,000 occurs, how much of that amount would the policyholder pay? b) How much premium will the primary insurance company retain under the treaty agreement? c) How much premium will the reinsurance company receive under the treaty agreement? d) If a loss of $250,000 occurs, how much will each of the following parties pay? 1) Policyholder pays: 2) Primary insurer pays: 3) Reinsurer pays: c) If a loss of $100,000 occurs, how much will each of the following parties pay? 1) Policyholder pays: 2) Primary insurer pays: 3) Reinsurer pays: 2. Assume a per-risk excess of loss facultative reinsurance agreement with deductible of $1,000,000 and policy limit of $5,000,000 is in place. For a primary policy with deductible of $50,000 and policy limit of $6,000,000, how much will the policyholder, ceding company and reinsurer pay? a) For a loss of $1,000,000, 1) Policyholder pays: 2) Ceding insurer pays: 3) Reinsurer pays: b) For a loss of $4,000,000, 1) Policyholder pays: 2) Ceding insurer pays: 3) Reinsurer pays