Q. Under the PML excess clause, what is the limit of additional liability imposed on the reinsurer if the estimated probable maximum loss (PML) is exceeded?

View solution

Q. What happens if the application of the PML excess clause leads to different shares in a loss for the direct insurer and the reinsurer?

View solution

Q. Which provision in a reinsurance agreement overrides other terms and conditions, including the errors clause?

View solution

Q. In reinsurance agreements, what is the purpose of the extension of cover clause?

View solution

Q. What is the purpose of the downgrade clause in reinsurance agreements?

View solution

Q. How do downgrade clauses in reinsurance agreements typically respond to a rating downgrade of the reinsurer?

View solution

Q. What triggers the activation of a downgrade clause in reinsurance agreements?

View solution

Q. What is the purpose of a cut-through provision in reinsurance agreements?

View solution

Q. When is a cut-through clause typically triggered in reinsurance agreements?

View solution

Q. In what situations can a cut-through provision be used in reinsurance agreements?

View solution

Q. What is the purpose of drafting a cut-through provision in a specific way in reinsurance agreements?

View solution

Q. What is the purpose of an errors and omissions clause in reinsurance agreements?

View solution

Q. What does the term "Loss Occurrence" mean in reinsurance agreements?

View solution

Q. How is the duration and extent of a Loss Occurrence defined for catastrophes other than hurricanes, earthquakes, and volcanic eruptions?

View solution

Q. How does the Company determine the claim period in case a catastrophe involves multiple insured perils?

View solution

Q. What is the purpose of the index clause in the reinsurance agreement?

View solution

Q. Under what condition is the index clause not applied in the reinsurance agreement?

View solution

Q. How is the time of payment of any claim determined in the reinsurance agreement?

View solution

Q. What happens to the priority and liability in the index clause when the Index fluctuates by 10% or more?

View solution

Q. What is the condition precedent to any liability to pay under the reinsurance contract?

View solution