PRC Practice Questions - Professional Reinsurance Certification Exam

In a surplus share treaty, how is the reinsurer's participation on any given risk determined?

By a fixed percentage set for every policy in the treaty By the cedent's retention line; the reinsurer takes the excess over the retention, up to the treaty's line limit By the losses incurred in the prior year By the reinsurer's own capital base

Correct Answer:

By the cedent's retention line; the reinsurer takes the excess over the retention, up to the treaty's line limit

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