Question

What is the difference between net and gross lines in surplus treaty agreements?

a.

Net lines are based on the ceding insurer's retention under the quota share treaty, while gross lines are based on the entire underlying quota share treaty limit.

b.

Net lines are based on the entire underlying quota share treaty limit, while gross lines are based on the ceding insurer's retention under the quota share treaty.

c.

Net lines and gross lines are the same thing and have no difference.

d.

Net lines are the total amount of premium ceded to the reinsurer, while gross lines are the total amount of premium retained by the ceding insurer.

Answer: (a).Net lines are based on the ceding insurer's retention under the quota share treaty, while gross lines are based on the entire underlying quota share treaty limit. Explanation:Net lines are based on the ceding insurer's retention under the quota share treaty, while gross lines are based on the entire underlying quota share treaty limit. The difference between net and gross lines is significant and can affect the monetary limits of the treaty.

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Q. What is the difference between net and gross lines in surplus treaty agreements?

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