Western Liability Insurer has a reinsurance contract with National Reinsurer, and the contract states that Western retains 25 percent of losses and 25 percent of premiums. National Re pays 75 percent of the losses and receives 75 percent of the premium minus a ceding commission.

a-What type of reinsurance contract is this?

b-If a $500,000 loss occurs, how much will National Re pay?

c-Who receives a ceding commission and why? (1 point)