|
|
Reinsurance functional specification Reinsurance functional requirement has been broadly classified in to two parts 1. Creating treaties 2. Attaching treaties. Name Defining different Types of treaties. Purpose To set up different treaties as per user requirement. Description Following are the different types of treaty system allows defining. Own retention. Ceding insurers will have differing systems of retention for different risk. In the context of reinsurance, a company's retention is the amount of any particular risk that it wishes to retain for itself. It will then reinsure the excess over that retention. For example, if an office has retention of $ 300,000 and the sum assured is $ 1,000,000, it will reinsure $ 700,000. Quota share; A form of reinsurance where all premiums and claims for business covered by the treaty are split between the direct writer and the reinsurer in the specified proportion Example: $1 million in fire insurance is split on a quota share basis, with Company A assuming 50% ($500,000), Company B assuming 30% ($300,000), and Company C assuming 20% ($200,000).
|
