SCI CRI – Certificate in Reinsurance Exam

The concept of a triggering incident is based on the average wind speed recorded at the European Qualified Stations, the data received by the meteorological agencies. The station is activated if it leads to a maximum wind speed higher than the threshold. For a group of at least four stations, a border is drawn around these activated stations. The cluster must be sequentially related for a minimum of 3 hours.  

For example, the regulation was released in 2008 and influenced by the defeat in 2009. In the case of a failure that happens, the 2009 system will be in operation. The failure that exists is most widely used, except for manufacturing or maritime business lines.

The legislative rationale for in-force refers only to the unwarranted cost in in-force measures. It is small in reach and thus not commonly used. The insurer may use it to run off expired policies (i.e. where no new regulations are being sold).

Stop-loss is a non-proportional form of reinsurance that functions similarly to over-loss reinsurance. Whereas the over-loss is related to a single loss number, either perchance or per case, and the stop-loss is applied to the overall amount of claims in the portfolio.

Facultative deal (or fac.): particular business/risk is presented to the insurer for approval or denial by the reinsurer. All sides are able to behave with their own best interests, regardless of the previous contractual agreements. For example, very big insured properties such as a skyscraper may be re-insured with a facsimile.

Reinsurance is usually directed to take the first place:
1. Any facultative reinsurance, covering particular threats.
2. Any proportional structure, either Quota-Share or Surplus.
3. Any XL reinsurance chance.
4. Any disaster or clash XL reinsurance
5. Any stop loss to cover the net reinsurance results.

Clash Excess of Loss: Reinsurance liability excess plan involving two or more coverages or policies, provided by the re-insured and included in the loss, for compensation to be extended. Typically, the annexation value of the reinsurance arrangement meets the limitations of either scheme.

Securitization is definitely connected to the risk Intermediate model that enables the transfer of risk obligations to the markets. As for reinsurance, it’s not that simple, it’s a hybrid model. This was initially seen by insurers who consider themselves as a liability warehouse.

Often the reinsurer knew the consequences more than the insurer himself, especially for very particular risks (cat, pandemic, technological risks, etc.). By that point, the reinsurer is an insider.

Risk that is significant at the level of the insurer with low insider knowledge will be a good candidate for securitisation. Disaster, reserve adequacy, and market cycle are the key risks of property and casualty insurance.

Reinsurance cession is defined the transaction of transferring part of the risk from the insurer (cedant or ceding company) to the reinsurer. According to the content of the reinsurance contract, it can be a transfer of a whole or part of single risks, policies or parts of a business.

Underwriting capacity: the maximum amount that the insurer expects to incur on a single loss risk while maintaining is the amount of insurance liability (in pro-rata, for compliance with the insurer) or catastrophe (in lieu of loss, for indemnity of excess loss by the insurer) that the insurer assumes (or retains).

The surplus method allows the insurer to keep small policies and to transfer the risk which is above the retention limit for the large policies. While Surplus treaty is a Reinsurance that allows the insurer to move and the re-insurer to take the risk that exceeds the retention limit.

There is no proportional sharing of premium, losses and loss expenses for non-proportional reinsurance. The reinsurer is only liable for the losses that exceed the treaty retention in exchange for a premium, which is agreed between the reinsurer and insurer. The payment of the premium is agreed without making reference to the premium paid to the insurer.

In the case of other cases , for example involving qualified criminal responsibility, the dates of occurrence of the occurrences giving rise to them and the filing of claim of the insured may be somewhat different. The case for lawsuits resulting from ailments caused by asbestos. When the Treaty is based on claims made, the claims asserted within the time protected by the Treaty shall come under the meaning of the Treaty.

The transferor collects premiums and makes payments on a regular basis over the accounting period. The reproduction of these cash flows in real-time for the allocated portion will produce tremendous accounting costs.

Audit: Some treaties set out how reinsurers will perform audits in the cedant premises. Such rules are seldom seen in practice. It appears when the reinsurers participate specifically in the administration of the lawsuit and, in this situation, have access to complete details in the hands of the transferor.

There are three separate accident-circuit workplace disorder (ACOD) provisions. The ACOD / A clearly states that every case is a special occurrence. The ACOD / C clause applies to countries such as Australia. The ACOD / B provision shall state the reinsurance scheme for exposure-based plans.

The money provision defines the money of which any payment is to be made. We use the exchange rate judgment on the date of money transfer for translation.

The insurance premium shall be the amount equal to the adjustment of this rate to the insurer’s calculation of the amount of profits. The adjusted premium shall take into account actual premium profits during the treaty year and  It is compatible with allowing incremental changes to the reinsurance premium. The fixed premium shall be the minimum price that the reinsurer wishes to earn towards the end of the year.

Downgrading provisions states that in situations when the reinsurer is insolvent, elects to end its current contract, refuses to meet its material duty under the reinsurance arrangement, or suffers a reduction in financial strength to a certain amount, the insurer has the option to cancel the reinsurance arrangement with immediate non-retroactive effect.

The use of the shelf system is opposed to a single car. The Shelf System entails greater compliance risks, which allows for the issuing of certain CAT bonds.

The sort of cause selected has a significant effect on the framework of the agreement. For example, in the case of a parametric transaction, the regulator would consider the SPV more readily than the SPRV as the recoveries are not specifically relevant to the real damages of the company due to the high-risk base.

Automatic settlement (or a contractual arrangement or more simply a deal): the re-insured business / risk must be ceded by the transferor in compliance with the terms of the contract and the re-insurer must recognize the re-insured business / risk. An example of this is the Auto Portfolio: all cars financed by the insurer should be covered by the Deal, without having to name any particular individual policy.

For certain purposes (excluding risks), the organization could not be re-assured by a contractual arrangement. Fac instead helps the insurer to increase its flexibility on other risks, by recovering surplus capacity, and the insurer is not involved in part of a specific scheme (not in the subscription guidelines).

In a regulatory point of view, the insurer has the same duties towards the insured, with or without reassurance, as contrasted to coinsurance. This is necessary for the insurer to pass its assets to the reinsurer, but it is not known to be a reinsurance undertaking. Such a transition is considered a novation, and permission by the regulator or the insured is normally necessary.

This may pose issues in the event of securitization, where hedging is not ideal, as we can see. In fact, in the event of legal issues of the insurer, for example in the case of the revision of current contracts by courts, re-insurers are frequently affected, except as specifically specified in the contract.

Insurance risks that are issued to transfer exposures and create additional risk capacity refer to the ILS securities insurance risks.

The match between a loss-making exposure and a compensatory payment is imperfect when it comes to the risk of loss arising.

Adverse development covers a finite is an insurance contract which refers to any event or condition which is or with either notice or the passage of time being.