Introduction to Reinsurance.pdf - Prince Lobel

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The Two Main Types of Reinsurance “FACULTATIVE” REINSURANCE Reinsurance transacted on an individual risk basis. The ceding company has the option to offer an individual risk to the reinsurer and the reinsurer retains the right to accept or reject the risk. “TREATY” REINSURANCE A transaction encompassing a block of the ceding company’s book of business. The reinsurer must accept all business included within the terms of the reinsurance contract.
Characteristics of The Reinsurance Contract Types FACULTATIVE: Individual risk review; Right to accept or reject each risk on its own merit; A profit is expected by the reinsurer in the short and long term and depends primarily on the reinsurer’s risk selection process; Adapts to short-term ceding philosophy of the insurer; A contract or certificate is written to confirm each transaction; Can reinsure a risk that is otherwise excluded from a treaty; Can protect a treaty from adverse underwriting results. TREATY: No individual risk scrutiny by the reinsurer; Obligatory acceptance by the reinsurer of covered business; A long-term relationship in which the reinsurer’s profitability is expected but measured and adjusted over an extended period of time; Less costly than “per risk” reinsurance; One contract encompasses all subject risks.
Page 1 and 2: April 4, 2008 Introduction to Reins
Page 3 and 4: Overview What is Reinsurance Insu
Page 5 and 6: Insurance/Reinsurance Similarities
Page 7 and 8: How Reinsurance Works It spreads th
Page 9: April 4, 2008 Types and Characteris
Page 13 and 14: Forms of Reinsurance Pro Rata (“
Page 15 and 16: Per Occurrence Excess Multiple Risk
Page 17 and 18: The Anatomy of a Reinsurance Claim
Page 25 and 26: April 4, 2008 Two Key Principles in
Page 27 and 28: “Uberrimae Fides” or the Duty o
Page 29 and 30: April 4, 2008 Common Problems and I
Page 31 and 32: Right of Inspection: Virtually all
Page 33 and 34: Non-Congruence of Insurance and Rei
Page 35 and 36: Declaratory Judgment Actions: Alth
Page 37 and 38: Agreements to Arbitrate and Confide
Page 39 and 40: Agreements to Arbitrate and Confide
Page 41 and 42: The Loss - Scenario A Mitchell's N
Page 43 and 44: The Reinsurance Claim Big Heart In

Introduction to Reinsurance.pdf - Prince Lobel

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