Question

What is the concern of reinsurers regarding the ceding insurer on catastrophe covers?What is the purpose of a second surplus treaty?

a.

The profit of the ceding insurer is well secured.To cede the surplus in excess of the first surplus treaty limits

b.

Reinsurers rarely share the fortunes of the ceding insurer on catastrophe covers.To provide bordereaux for peak risks

c.

Ceding insurers should be compelled to support the catastrophe nature of such covers.To determine the optimum capacity of the treaty

d.

Reinsurers may lose several years' premium in one loss.To exchange against incoming business

Answer: Reinsurers rarely share the fortunes of the ceding insurer on catastrophe covers.To cede the surplus in excess of the first surplus treaty limits Explanation:Reinsurers are growing increasingly concerned at the fact that they rarely share the fortunes of the ceding insurer on catastrophe covers.The surplus in excess of the first surplus treaty limits is ceded through a second surplus treaty.

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Q. What is the concern of reinsurers regarding the ceding insurer on catastrophe covers?What is the purpose of a second surplus treaty?

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