What do you mean by disequilibrium in Balance of payments;

(a) (2 points) Compare and contrast yearly-renewable-term (YRT) and modified coinsurance (Mod-co) reinsurance arrangements. (b) (5 points) NRT Life is a Canadian life insurance company. The management team is considering entering into either a YRT or a Mod-co reinsurance agreement with HND Re. You are given the following: Policy Assumptions Issue Date January 1, 2018 Plan of Insurance Whole Life Face Amount 500.000 Premium Rate per 1000 10 Annual Policy Fee 20 Reserves per 1000 as at December 31, 2018 0.75 First Year Commissions 90% Premium Tax 1.50% First Year Expenses 400 Ceding Company and Reinsurer Assumptions NRT Life HND Rc Initial Surplus 0 0 Investment Rate of Return 0 0 YRT Terms Amount Reinsured 350.000 Annual Cession Fee 15 2018 YRT Premium per 1000 0.60 Reserves per 1000 as at December 31, 2018 0.75 Mod-co Terms Ceded Percentage 70% Expense Allowance 100% HND Re will allow NRT Life to retain the entire policy fee HND Re will also reimburse NKT Life for premium tax paid on the ceded premium Assess which reinsurance arrangement is more effective at reducing the strain from new business on 2018 income. Show all work.(C) (4 points) NRT Life is looking for surplus relief to improve the financials of its new Fixed Deferred Annuity product You are given: 50% Quota-Share . 5% Expense Allowance Pre Reinsurance Balance Sheet Balance Cedent Reinsurer (+) Cash 0 (+) Bonds 500 (-) Reserves 500 0 (+) Receivable/Payable 0 (=) Surplus 0 Construct a post reinsurance balance sheet for this block similar to the above, assuming the treaty structure is: (1) Mod-Co (ii) Mod-Co with Funds Withheld (ili) Part-Co