Question

What is the meaning of Rate on Line?

a.

The flat rate on ‘catastrophe’ covers

b.

The rate applied to the limit of cover

c.

The number of years in which the limit can be recouped

d.

The flat premium amount quoted

Posted under IC85 Reinsurance Management

Answer: (b).The rate applied to the limit of cover Explanation:When the rate is applied to the limit of cover it is known as “Rate on Line”. This assists the reinsurer to judge rating consistency as between various covers that he quotes.

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