Question

How are premiums and losses shared in surplus reinsurance?

a.

In the proportion that the ceding insurer’s retention and the reinsurer’s share bear to the sum insured of the original insurance.

b.

Equally between the ceding insurer and the reinsurer.

c.

Based on the amount of premiums paid by the ceding insurer.

d.

Based on the amount of losses incurred by the reinsurer.

Posted under IC85 Reinsurance Management

Answer: (a).In the proportion that the ceding insurer’s retention and the reinsurer’s share bear to the sum insured of the original insurance. Explanation:In surplus reinsurance, premiums and losses are shared in the proportion that the ceding insurer’s retention and the reinsurer’s share bear to the sum insured of the original insurance.

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Q. How are premiums and losses shared in surplus reinsurance?
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