Question

What is a second surplus treaty in reinsurance?

a.

A treaty that receives risks where the original sum insured was smaller than the ceding insurer's retention.

b.

A treaty that is automatically accepted by the reinsurer for every risk that the ceding insurer intends to share.

c.

A treaty that receives risks where the original sum insured was larger than the ceding insurer's retention plus the amount allocated to the first surplus treaty.

d.

A treaty that is arranged after the ceding insurer has exhausted all other options for reinsurance.

Posted under IC85 Reinsurance Management

Answer: (c).A treaty that receives risks where the original sum insured was larger than the ceding insurer's retention plus the amount allocated to the first surplus treaty. Explanation:A second surplus treaty is a treaty that receives risks where the original sum insured was larger than the ceding insurer's retention plus the amount allocated to the first surplus treaty. It is an additional surplus treaty that is arranged when the ceding insurer has policies where the sums insured exceed the limits of the first surplus treaty.

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Q. What is a second surplus treaty in reinsurance?
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