Reinsurance arrangements differ in how they accept business, allocate exposure and respond to losses. The Singapore College of Insurance’s Certification in Reinsurance examines these mechanisms alongside placement, accounting and claims procedures. Begin by separating the underlying policy from the reinsurance contract, then identify what is retained and what can be recovered. The sixty concepts follow the published CRI domains, including life reassurance and developments in reinsurance. Qualitative examples help compare structures and interpret wording-dependent outcomes. The concept sections contain no numerical worked examples, so use the official eBook for calculation practice as well as detailed contractual treatment. The actual contract determines scope, allocation and payment.
Exam and assessment essentials
- Official examination name
- Certification in Reinsurance (CRI), administered by the Singapore College of Insurance.[1]
- Structure
- 100 multiple-choice questions: Part I contains 80 questions; Part II contains 20 questions involving calculations.[1]
- Duration
- 2 hours.[1]
- Passing requirements
- At least 40 marks in Part I and 10 marks in Part II, together with an overall score of at least 70 marks out of 100.[1]
- Marking
- Each correct answer earns 1 mark. Wrong or blank answers attract no deduction.[1]
- Examination mode
- English-medium, closed-book Computer Screen Examination. Self-study is available.[1]
- Study materials
- Candidates prepare using the eBook. SCI no longer issues hard copy study texts; updates appear in the eBook and its Version Control Record.[1]
- Published edition note
- The CRI page identifies Chapter 11 as appearing only in the 4th Edition, Version 1.0, applicable to examinations from 23 April 2025 onwards. The update notices referenced here do not establish a newer CRI version.[1][2][3]
- Experience preference
- SCI states that participants should preferably have 6 months of relevant working experience. The wording expresses a preference.[1]
- Sittings, resits and exemptions
- Normally held two to four times a year on a weekday. SCI states that attempts are unlimited and no exemption is granted.[1]
- Result and CPD
- SCI issues a result slip, not a certificate document. Passing attracts 2 CPD hours.[1]
What the syllabus covers
This study map groups the official scope into revision themes. It is not an official chapter list or a prediction of question weightings.
Introduction to reinsurance
Separate the underlying policy from reinsurance; understand risk transfer, retention, capacity, retrocession and direct coinsurance.[1]
The reinsurance market
Examine market participants, intermediary functions, counterparty security and the effect of market conditions on available protection.[1]
Forms of reinsurance
Classify arrangements by placement method, acceptance obligation and loss-sharing basis, then recognise gaps between combined covers.[1]
Facultative reinsurance
Follow individual risk selection, underwriting information, binding, conditions and the treatment of changes to the underlying risk.[1]
Proportional treaties
Understand quota share, surplus, retention schedules, allocation, ceding commission, sliding-scale commission and profit commission.[1]
Non-proportional treaties
Distinguish risk, event and aggregate protection; examine layers, loss definitions, pricing, premium adjustment and reinstatements.[1]
Reinsurance accounting
Connect technical accounts, bordereaux, outstanding losses, cash calls and premium portfolio adjustments.[1]
Contract wordings
Interpret coverage bases, exclusions, settlement clauses, claims involvement, error correction, dispute provisions, cut-through arrangements and inuring order.[1]
Life reassurance
Examine mortality exposure, risk premium and coinsurance methods, underwriting acceptance and continuity when policies change.[1]
Office practice procedure
Control placement records, capacity allocation, claims recoveries, reconciliations and renewal information.[1]
Issues arising from the evolving reinsurance landscape
Explore insurance-linked securities, alternative triggers, collateral arrangements and emerging accumulation risks as applied examples within the published domain.[1]
60 key concepts to understand
- The policy and the reinsurance contract create separate obligations
- Risk transfer creates a new recovery exposure
- Retention should reflect both individual losses and accumulations
- Underwriting capacity and claims liquidity solve different problems
- Direct coinsurance differs from cession and retrocession
- Market participants offer different kinds of capacity
- A broker connects placement and servicing responsibilities
- Counterparty security requires more than a rating
- Market conditions affect wording as well as price
- Facultative and treaty describe how business is accepted
- Obligatory and optional arrangements allocate selection rights
- Proportional sharing differs from loss-layer protection
- A programme should address different patterns of loss
- Facultative placement should address a specific coverage need
- Individual risk assessment depends on a complete submission
- Binding requires agreement on the offered protection
- Placement conditions need clear ownership and closure
- Changes to the original risk may require renewed agreement
- Quota share participates across qualifying business
- Surplus allocates exposure above the chosen retention
- Retention schedules make surplus capacity risk-sensitive
- Proportional sharing can be qualified by event restrictions
- Ceding commission addresses the cedent’s expense burden
- Sliding-scale commission responds to treaty loss experience
- Profit commission depends on the defined treaty account
- Risk excess depends on the contractual definition of a risk
- Event excess protects against losses accumulating from an occurrence
- Aggregate protection responds to cumulative experience
- Layer exhaustion leaves exposure above the available limit
- The loss measure determines what reaches the layer
- Reinsurance pricing must consider exposure beyond past claims
- Exposure-based premiums can require an adjustment
- Reinstatement restores capacity on agreed terms
- Technical accounts separate account components from payment
- Bordereaux support verification of treaty business
- Paid claims and outstanding estimates serve different purposes
- Cash loss provisions address funding before routine settlement
- Premium portfolio adjustments allocate unexpired exposure
- Risk-attaching and losses-occurring bases identify different business
- Scope and exclusions take priority over descriptive labels
- Following settlements does not remove coverage boundaries
- Claims cooperation differs from claims control
- Errors-and-omissions protection has contractual boundaries
- Arbitration and governing law answer different questions
- Cut-through wording needs a legally effective payment route
- Inuring order determines the loss presented to later cover
- Life reassurance distinguishes individual severity from portfolio mortality
- Risk premium reassurance focuses on the agreed insured risk
- Life coinsurance shares broader policy economics
- Automatic acceptance operates within underwriting boundaries
- Policy changes can alter continuing reassurance
- Contract certainty requires an authoritative record
- Capacity allocation must follow actual market commitments
- Claims records should connect coverage to collection
- Reconciliation needs to trace differences to their cause
- Renewal submissions must explain changes in the exposure
- Insurance-linked securities transfer defined risk to investors
- Alternative triggers introduce basis risk
- Collateral changes security without settling coverage questions
- Emerging accumulations can cross familiar business boundaries
Introduction to reinsurance
1. The policy and the reinsurance contract create separate obligations
An insurer buys reinsurance to recover an agreed part of its insurance exposure from another party. The underlying policy and the reinsurance contract remain separate agreements. Reinsurance ordinarily leaves the insurer responsible to its policyholder, even where a recovery is delayed, disputed or unavailable.[1]
Common mistake: Assuming a disputed reinsurance recovery automatically excuses the insurer from paying its policyholder.
Introduction to reinsurance
2. Risk transfer creates a new recovery exposure
Reinsurance can reduce the insurer’s exposure to covered losses, but the value of that protection depends on enforceable terms and a reinsurer able to perform. Underwriting risk therefore sits alongside credit, coverage and collection risks. A promised recovery and a received payment are different stages.[1]
Common mistake: Treating an expected recovery as cash already available to meet insurance claims.
Introduction to reinsurance
3. Retention should reflect both individual losses and accumulations
Retention is the exposure the insurer keeps under the relevant arrangement. Choosing it requires more than assessing an isolated large claim: related losses can accumulate across policies, locations and classes. Protection should fit the insurer’s resources, portfolio and willingness to absorb volatility, rather than copying another insurer’s programme.[1]
Common mistake: Setting retention from individual policy size while overlooking correlated losses across the portfolio.
Introduction to reinsurance
4. Underwriting capacity and claims liquidity solve different problems
Reinsurance may let an insurer accept larger exposures while keeping its retained risk manageable. That capacity does not necessarily provide immediate money when claims fall due. Recovery conditions, claims verification and payment arrangements determine liquidity, so the insurer must consider how it will fund settlements as well as eventual losses.[1]
Common mistake: Equating greater underwriting capacity with immediate access to funds for every claim.
Introduction to reinsurance
5. Direct coinsurance differs from cession and retrocession
Direct coinsurers participate in the insurance of the original risk, with their obligations determined by the policy. A cession passes exposure from an insurer to a reinsurer. Retrocession passes assumed reinsurance exposure onwards. These positions identify whose contract responds and prevent confusion over who owes payment to whom.[1]
Common mistake: Assuming every participant in the risk chain has a direct obligation to the insured.
The reinsurance market
6. Market participants offer different kinds of capacity
Professional reinsurers, insurers accepting reinsurance and specialist market participants differ in expertise, appetite and financial backing. Capacity must suit the class, territory and contract structure being placed. A familiar name or attractive quotation does not establish that a participant can support every exposure in a programme.[1]
Common mistake: Assuming financial scale alone proves expertise in the class of business being offered.
The reinsurance market
7. A broker connects placement and servicing responsibilities
A broker can prepare submissions, approach markets, negotiate terms and help administer premiums and claims. The mandate and applicable rules determine its responsibilities. Accurate communication matters throughout: an intermediary cannot cure a coverage gap simply by transmitting a claim or expressing confidence that markets will pay.[1]
Common mistake: Assuming the broker guarantees either the reinsurer’s payment or the adequacy of every term.
The reinsurance market
8. Counterparty security requires more than a rating
A security assessment considers financial strength, recoverable concentrations, payment behaviour and the legal entity providing cover. Ratings can inform that judgement but do not guarantee performance. Concentrating placements with connected entities may leave an insurer exposed to a common financial weakness despite apparently using several counterparties.[1]
Common mistake: Counting different company names as independent security without examining their ownership and financial connections.
The reinsurance market
9. Market conditions affect wording as well as price
When capacity becomes scarce, reinsurers may change exclusions, attachments, offered limits or claims conditions alongside premium. More abundant capacity can encourage competition, but broader cover is never automatic. Renewal comparisons should therefore examine the protection purchased, rather than treating a lower quoted premium as a complete measure of value.[1]
Common mistake: Comparing premium alone when exclusions, attachment and available capacity have also changed.
Forms of reinsurance
10. Facultative and treaty describe how business is accepted
Facultative placement involves separate consideration of an individual risk. Treaty placement establishes terms for a defined category of business. This distinction concerns acceptance and administration, rather than the loss-sharing method: either approach can use proportional or non-proportional protection, subject to the arrangement actually agreed.[1]
Common mistake: Assuming facultative always means proportional and treaty always means excess-of-loss protection.
Forms of reinsurance
11. Obligatory and optional arrangements allocate selection rights
An obligatory treaty generally requires the cedent to cede, and the reinsurer to accept, qualifying business. Other arrangements reserve selection rights to either party. Where the cedent chooses what to cede but the reinsurer must accept qualifying offers, adverse selection becomes a particular concern when defining scope and terms.[1]
Common mistake: Assuming every treaty removes individual selection rights from both parties in the same way.
Forms of reinsurance
12. Proportional sharing differs from loss-layer protection
Proportional reinsurance shares covered premiums and losses according to an agreed allocation. Non-proportional protection responds when the relevant loss exceeds an attachment, subject to its limit and conditions. The first participates in ordinary portfolio experience; the second targets a defined part of the loss distribution.[1]
Common mistake: Expecting excess-of-loss recoveries to follow the same allocation as the underlying insurance premium.
Forms of reinsurance
13. A programme should address different patterns of loss
A reinsurance programme should reflect how losses can arise across the insurer’s business. Proportional participation, protection for severe individual losses and protection for a common event address different needs. Combining them requires identifying what each arrangement protects and which loss patterns remain retained. Buying several covers does not by itself establish that the programme fits the portfolio.[1]
Common mistake: Choosing covers by their familiar names without testing them against the portfolio’s plausible loss patterns.
Facultative reinsurance
14. Facultative placement should address a specific coverage need
Facultative cover can address an unusual risk, treaty exclusion or exposure beyond available treaty capacity. The placement should identify precisely what remains to be protected. Depending on structure, it may cover a share of the whole risk or a loss layer; those approaches do not produce equivalent recoveries.[1]
Common mistake: Buying facultative capacity without defining whether it covers a risk share or a loss layer.
Facultative reinsurance
15. Individual risk assessment depends on a complete submission
A facultative reinsurer evaluates the offered risk using information about operations, hazards, protection, values, claims experience and underlying terms. Missing or inconsistent information can distort both pricing and coverage decisions. The cedent should explain uncertainties and significant features rather than assume the reinsurer knows what the direct insurer knows.[1]
Common mistake: Omitting a known hazard because the underlying policy already refers to the insured’s business.
Facultative reinsurance
16. Binding requires agreement on the offered protection
A quotation proposes protection on stated terms. Binding requires agreement through communications made by parties with the necessary authority. A response that changes the offered terms may require further agreement rather than complete the placement. The record should identify the accepted wording, participation and commencement so that an instruction to seek cover is distinguishable from confirmation that cover has been agreed.[1]
Common mistake: Treating acceptance with a material change as conclusive agreement to the revised protection.
Facultative reinsurance
17. Placement conditions need clear ownership and closure
A facultative offer may depend on information, risk improvements or other requirements. Their effect depends on the agreed wording: some concern acceptance, while others govern continuing cover. Recording who must satisfy each condition and obtaining clear confirmation prevents uncertainty about whether protection exists or remains subject to qualification.[1]
Common mistake: Assuming a condition disappears because the underlying insurer has accepted the risk.
Facultative reinsurance
18. Changes to the original risk may require renewed agreement
Facultative cover is based on the risk and terms accepted by the reinsurer. Changes to operations, values, policy coverage or insured interests may affect that bargain. The reinsurance agreement determines reporting and consent requirements; an underlying endorsement should therefore be checked against the accepted placement rather than assumed to flow through.[1]
Common mistake: Assuming every endorsement to the original policy automatically amends the facultative reinsurance contract.
Proportional treaties
19. Quota share participates across qualifying business
A quota share applies a fixed ceded proportion to qualifying business, subject to contractual limits and exclusions. The reinsurer shares covered premium and claims across that business. This can support portfolio growth and spread experience, but it also passes away part of the favourable results from profitable risks.[1]
Common mistake: Treating quota share as protection bought only for unusually large or unattractive risks.
Proportional treaties
20. Surplus allocates exposure above the chosen retention
A surplus treaty generally cedes insured exposure above an agreed retention, within treaty capacity. The ceded proportion therefore varies between risks. Although allocation is established from exposure, covered claims follow that allocated proportion; the treaty does not simply pay the part of each claim exceeding the retained insured exposure.[1]
Common mistake: Treating surplus as excess-of-loss because both refer to exposure above a retention.
Proportional treaties
21. Retention schedules make surplus capacity risk-sensitive
Where agreed, a surplus retention schedule allows different retained exposures for different risk categories. Since treaty capacity expressed in lines relates to the applicable retention, a lower retention can also reduce available automatic capacity. Retention choice therefore affects both net exposure and the need for additional placement.[1]
Common mistake: Reducing retention while assuming the same automatic capacity remains available under a lines-based treaty.
Proportional treaties
22. Proportional sharing can be qualified by event restrictions
A proportional treaty’s allocation of individual risks does not necessarily describe its entire response to a catastrophe. Some treaties also restrict the reinsurer’s combined liability for losses arising from an event. Where such provisions apply, the cedent must consider both the accepted cessions and the event restrictions before assessing protection against accumulated losses.[1]
Common mistake: Assuming an accepted proportional cession removes the need to examine treaty-wide accumulation restrictions.
Proportional treaties
23. Ceding commission addresses the cedent’s expense burden
The direct insurer incurs acquisition and administration expenses even when it passes premium to a proportional reinsurer. Ceding commission provides an agreed allowance against that burden. It is a negotiated treaty item, distinct from the ceded share and brokerage, and does not guarantee full reimbursement of actual expenses.[1]
Common mistake: Confusing commission with the ceded share or assuming it reimburses every actual expense.
Proportional treaties
24. Sliding-scale commission responds to treaty loss experience
A sliding-scale arrangement adjusts commission according to an agreed measure of treaty performance, within contractual bounds. It links the cedent’s allowance to loss experience and can require later reconciliation of provisional commission. The defined treatment of outstanding losses matters because developing claims can alter the eventual adjustment.[1]
Common mistake: Treating provisional commission as final before the contractual loss measure has been established.
Proportional treaties
25. Profit commission depends on the defined treaty account
Profit commission shares a contractually defined surplus with the cedent after specified deductions. Those deductions may include losses, expense allowances and carried-forward deficits. A favourable underwriting impression is insufficient: the account definition determines whether any commission arises, and later loss development may affect the result.[1]
Common mistake: Assuming profitable current business guarantees payment without checking deductions and carried-forward losses.
Non-proportional treaties
26. Risk excess depends on the contractual definition of a risk
Per-risk excess-of-loss protection applies its attachment and limit to the loss allocated to a defined risk. The wording determines whether buildings, locations or connected operations are treated together. Physical proximity alone does not settle the question, and the chosen definition can materially change the insurer’s retained loss.[1]
Common mistake: Assuming each policy, building or address necessarily constitutes a separate treaty risk.
Non-proportional treaties
27. Event excess protects against losses accumulating from an occurrence
Event excess-of-loss combines qualifying losses attributed to a covered occurrence before testing attachment and limit. It can protect against a catastrophe affecting many insured risks. The occurrence definition and aggregation conditions govern which losses belong together; a shared weather label alone may not establish a single recoverable event.[1]
Common mistake: Aggregating every loss from a broad catastrophe description without applying the contractual occurrence definition.
Non-proportional treaties
28. Aggregate protection responds to cumulative experience
Aggregate protection measures covered losses collectively over the contract’s defined accounting basis, rather than requiring an individual claim or event to breach attachment. A stop-loss arrangement may relate protection to portfolio performance. Eligibility, exclusions and the definition of the loss measure determine which adverse experience is actually transferred.[1]
Common mistake: Assuming aggregate cover includes every loss recorded anywhere in the insurer’s accounts.
Non-proportional treaties
29. Layer exhaustion leaves exposure above the available limit
An excess-of-loss layer covers a band of qualifying loss above its attachment, up to the available limit. Once that band is exhausted, further loss remains with the cedent unless another cover responds. Adjoining layers must use compatible loss definitions and attachment bases if they are intended to provide continuous protection.[1]
Common mistake: Assuming the presence of an upper layer removes every gap above the lower layer.
Non-proportional treaties
30. The loss measure determines what reaches the layer
An excess-of-loss contract defines the loss against which attachment and limit apply. Its treatment of claim expenses, salvage, other recoveries and underlying reinsurance can change the amount entering the layer. Reading the monetary limit without this definition gives an incomplete picture of the protection purchased.[1]
Common mistake: Applying attachment to the headline claim payment without checking expenses and permitted deductions.
Non-proportional treaties
31. Reinsurance pricing must consider exposure beyond past claims
Past claims help a reinsurer understand experience, but they may reveal little about severe losses that have not yet occurred. Exposure assessment considers insured operations, concentrations, vulnerability and plausible loss scenarios. Changes in the portfolio or the protection being offered can make earlier experience less representative. A quiet claims record therefore needs interpretation alongside the current exposure.[1]
Common mistake: Treating an absence of past recoveries as evidence that the offered protection has little loss potential.
Non-proportional treaties
32. Exposure-based premiums can require an adjustment
Some excess-of-loss contracts price protection by reference to a defined measure of underlying business, with a deposit and later adjustment. The contract may also specify a minimum premium. Accurate declarations matter because changing portfolio volume can alter premium even where the layer attachment and limit remain unchanged.[1]
Common mistake: Assuming the deposit is final or automatically refundable when underlying business falls.
Non-proportional treaties
33. Reinstatement restores capacity on agreed terms
A covered loss can consume a layer’s available limit. Reinstatement provisions determine whether and how capacity is restored, and whether additional premium is due. Restoration may be restricted by the agreed allowance or aggregate capacity, so the cedent must distinguish remaining protection from the original stated limit.[1]
Common mistake: Assuming every loss restores the original limit automatically and without additional cost.
Reinsurance accounting
34. Technical accounts separate account components from payment
A treaty technical account brings together ceded premiums, commissions, claims and other agreed entries. The net balance identifies an amount due between the parties, but account presentation and cash settlement are separate processes. Correct classification allows each item to be checked and prevents a net figure from concealing errors.[1]
Common mistake: Checking only the net balance while leaving the underlying premium and claim entries unverified.
Reinsurance accounting
35. Bordereaux support verification of treaty business
A bordereau provides structured detail about ceded risks, premiums or claims. Its contents and required reporting basis depend on the contract. Accurate identifiers and classifications let parties test eligibility, allocation and account entries. A summary total alone may conceal duplicate records, excluded business or a cession assigned incorrectly.[1]
Common mistake: Assuming a balanced total proves that every underlying record is accurate and eligible.
Reinsurance accounting
36. Paid claims and outstanding estimates serve different purposes
Paid claims record amounts settled, while outstanding estimates represent expected further claim costs. Both can affect the view of treaty experience, but their accounting and settlement treatment differ. Developing estimates may influence reserves or commission adjustments without creating an immediate right to payment of the entire estimated recovery.[1]
Common mistake: Treating an outstanding claim estimate as an immediately payable reinsurance cash balance.
Reinsurance accounting
37. Cash loss provisions address funding before routine settlement
Cash loss provisions can allow an eligible claim recovery to be requested outside routine account settlement. The wording governs qualification, evidence and payment conditions. Any resulting payment must be linked to the eventual account so that early reimbursement supports liquidity without causing the same recovery to be collected again.[1]
Common mistake: Including a cash loss in account settlement without deducting the payment already received.
Reinsurance accounting
38. Premium portfolio adjustments allocate unexpired exposure
Where a treaty provides for portfolio entry or withdrawal, accounting adjustments help allocate premium associated with continuing unexpired exposure between contract positions. Their purpose is to align the assumed risk with the relevant premium. The wording determines the method; such adjustments are not interchangeable with ordinary new-business cessions.[1]
Common mistake: Treating a portfolio adjustment as extra premium unrelated to the exposure being transferred.
Contract wordings
39. Risk-attaching and losses-occurring bases identify different business
A risk-attaching basis generally links cover to qualifying original policies attaching during the reinsurance contract. A losses-occurring basis generally links cover to qualifying losses occurring during it. Precise wording determines the response. Renewal and termination can therefore leave continuing liabilities even after new business stops entering a contract.[1]
Common mistake: Assigning every claim to the treaty current when the claim is reported.
Contract wordings
40. Scope and exclusions take priority over descriptive labels
A treaty’s business classes, territories, exclusions and limits define the protection purchased. Broad descriptions such as property or casualty are insufficient to decide whether a particular exposure qualifies. An endorsement may modify the original wording, so the complete agreed contract must be read before relying on a summary description.[1]
Common mistake: Relying on the treaty’s title while overlooking an exclusion or modifying endorsement.
Contract wordings
41. Following settlements does not remove coverage boundaries
Follow-the-settlements and follow-the-fortunes clauses can restrict a reinsurer’s ability to revisit the cedent’s underlying decisions, but their effect depends on wording and applicable law. They do not automatically bring every payment within cover. The cedent still needs to establish the contractual basis for the recovery claimed.[1]
Common mistake: Assuming an ex gratia or excluded payment becomes recoverable merely because the cedent settled it.
Contract wordings
42. Claims cooperation differs from claims control
A cooperation clause may require information, consultation or assistance, while a control clause may give the reinsurer greater authority over claim handling or settlement. The actual obligations and consequences depend on the wording. The cedent must reconcile those requirements with its responsibilities under the original insurance policy.[1]
Common mistake: Treating a duty to cooperate as identical to a right to control settlement.
Contract wordings
43. Errors-and-omissions protection has contractual boundaries
An errors-and-omissions clause may preserve the intended operation of cover despite specified inadvertent administrative mistakes, subject to correction and other conditions. It is not a general remedy for excluded risks, missing agreement or deliberate misconduct. The wording must be checked before assuming an error can be cured retrospectively.[1]
Common mistake: Using an administrative-error clause to claim cover for business the reinsurer never agreed to accept.
Contract wordings
44. Arbitration and governing law answer different questions
An arbitration clause sets out an agreed dispute process, while governing law identifies the legal rules used to interpret the contract. The arbitration seat and procedure may also matter. These provisions should work together; describing arbitration as an industry process does not establish its confidentiality, powers or available remedies.[1]
Common mistake: Assuming arbitration automatically guarantees confidentiality or displaces every possible role for the courts.
Contract wordings
45. Cut-through wording needs a legally effective payment route
A cut-through provision seeks to direct reinsurance payment to a specified party in defined circumstances. Whether it creates an enforceable direct right depends on its drafting and applicable law, including insolvency considerations. Naming an intended recipient alone does not establish that ordinary contractual and creditor rules have been displaced.[1]
Common mistake: Assuming any clause labelled cut-through guarantees direct recovery despite applicable insolvency rules.
Contract wordings
46. Inuring order determines the loss presented to later cover
Reinsurance that inures to another cover reduces the exposure measured under that later arrangement, as the wordings specify. Identifying the intended order avoids overstating recoveries or understating retained loss. Gross and net loss bases, together with the treatment of unavailable recoveries, must be understood across the whole programme.[1]
Common mistake: Deducting every possible recovery without checking which protection actually inures to the layer.
Life reassurance
47. Life reassurance distinguishes individual severity from portfolio mortality
Life reassurance can reduce exposure to a large claim on an individual life and help manage adverse mortality experience across a portfolio. These are related but different needs. Underwriting support may improve risk assessment, yet reassurance does not remove the life insurer’s responsibility for its own acceptance decisions and policy obligations.[1]
Common mistake: Assuming protection against large individual claims necessarily covers every form of adverse mortality experience.
Life reassurance
48. Risk premium reassurance focuses on the agreed insured risk
Yearly renewable term reassurance commonly transfers mortality exposure through a separate risk premium rather than sharing all original policy premiums and savings elements. The reassured amount follows the treaty’s definition, which may relate to benefit and reserve measures. Age-related pricing and renewal terms depend on the agreed basis.[1]
Common mistake: Assuming risk premium reassurance automatically shares investment returns or uses an identical reserve definition everywhere.
Life reassurance
49. Life coinsurance shares broader policy economics
Life coinsurance commonly shares a proportion of original policy premiums, benefits and related financial obligations. It can transfer broader experience than mortality-only reassurance. However, arrangements differ in how assets, reserves and investment effects are handled, so the label alone does not establish which party holds assets or bears every risk.[1]
Common mistake: Confusing life coinsurance with direct coinsurance or assuming assets always pass to the reassurer.
Life reassurance
50. Automatic acceptance operates within underwriting boundaries
A life treaty may permit automatic cession where the insurer follows agreed underwriting rules and acceptance limits. Cases outside those boundaries may need facultative assessment. Previous cover, medical evidence and the insurer’s decision can affect eligibility, so automatic acceptance is a defined authority rather than unrestricted permission to cede.[1]
Common mistake: Assuming an automatic life treaty accepts every policy the direct insurer chooses to issue.
Life reassurance
51. Policy changes can alter continuing reassurance
Lapse, reinstatement, benefit increases and replacement can change the exposure originally accepted by a life reassurer. The treaty determines reporting, continuation and fresh underwriting requirements. Administration must link policy events to reassurance records so that restored or enlarged benefits are not assumed to carry unchanged reinsurance protection.[1]
Common mistake: Assuming restored direct insurance automatically restores reassurance on the same terms and benefit.
Office practice procedure
52. Contract certainty requires an authoritative record
Placement records should establish the agreed business, shares, conditions, wording and amendments. Drafts, emails and final documents need a clear relationship so staff can identify the authoritative terms. This supports underwriting and claims decisions and helps reveal discrepancies before an account or recovery is prepared.[1]
Common mistake: Using an old draft because it is easier to find than the agreed contract.
Office practice procedure
53. Capacity allocation must follow actual market commitments
A placement can involve several subscribing reinsurers, each with an agreed participation. The team must distinguish requested capacity, offered capacity and finally allocated commitments. Confirmed shares should reconcile to the intended placement, while any unplaced exposure remains visible rather than being concealed by optimistic summaries.[1]
Common mistake: Adding indicative offers as though each were a final, independently bound commitment.
Office practice procedure
54. Claims records should connect coverage to collection
A recovery file should connect the original claim, applicable reinsurance contracts, allocation rationale, notices and payment status. This lets handlers distinguish disputed coverage from incomplete documentation or unpaid agreed balances. Recording subsequent claim developments and receipts preserves that connection as the underlying settlement changes.[1]
Common mistake: Closing the recovery record when the insured is paid rather than when reinsurance balances are resolved.
Office practice procedure
55. Reconciliation needs to trace differences to their cause
Cedent, broker and reinsurer records can differ because of allocation errors, missing entries, payment processing or inconsistent account treatment. Reconciliation should identify the cause rather than force balances to agree. Clear references and separate tracking of disputed items help prevent duplicated collection and unexplained write-offs.[1]
Common mistake: Posting an unexplained balancing adjustment instead of identifying the transaction causing the difference.
Office practice procedure
56. Renewal submissions must explain changes in the exposure
Renewal decisions depend on the business being offered, not simply the previous treaty’s results. Submissions should explain shifts in underwriting, values, geographic concentration, claims estimates and policy terms. Consistent data definitions help reinsurers distinguish genuine changes in exposure from differences in how the portfolio has been reported.[1]
Common mistake: Presenting stable premium income as evidence that the underlying risk profile is unchanged.
Issues arising from the evolving reinsurance landscape
57. Insurance-linked securities transfer defined risk to investors
Insurance-linked securities connect insurance risk with capital market funding. A catastrophe bond commonly exposes investor principal to a defined trigger, with specified proceeds available to support the sponsor’s protection. Investors do not simply lose their yield whenever a catastrophe occurs; the contractual trigger and payout structure determine the financial effect.[1]
Common mistake: Describing every catastrophe bond as a conventional indemnity treaty or a simple forfeiture of interest.
Issues arising from the evolving reinsurance landscape
58. Alternative triggers introduce basis risk
An indemnity trigger refers to the protected party’s defined losses, while parametric or index triggers use specified observable measures. Alternative triggers can simplify verification but may diverge from actual loss. Basis risk is that mismatch: severe insured losses can occur without a corresponding payout, or a payout can exceed those losses.[1]
Common mistake: Assuming an objectively measurable trigger necessarily tracks the sponsor’s actual financial loss closely.
Issues arising from the evolving reinsurance landscape
59. Collateral changes security without settling coverage questions
Collateralised protection sets aside assets to support contractual payments, potentially reducing reliance on an unsecured promise. Its effectiveness depends on eligible assets, custody, access and release provisions. Disputed or developing losses can restrict release, and collateral cannot make an excluded event recoverable merely because funds are available.[1]
Common mistake: Treating funded collateral as a guarantee that every claimed loss will be paid.
Issues arising from the evolving reinsurance landscape
60. Emerging accumulations can cross familiar business boundaries
Climate-related hazards, cyber incidents and shared infrastructure dependencies can create correlated losses across locations or insurance classes. Historical experience may not capture a changed exposure pattern. Assessing common causes, contract definitions and exclusions helps an insurer judge whether its programme responds to the resulting accumulation.[1]
Common mistake: Assuming a geographically dispersed portfolio cannot suffer concentrated losses from a shared dependency.
How to revise for SCI CRI
1. Build the coverage map
Use the official eBook to connect every published domain to the concepts above. Mark where the guide provides a general explanation and where the study text supplies a specific contractual treatment. Include life reassurance and evolving reinsurance issues in the same coverage check.
2. Compare structures through the same loss
Follow a qualitative property loss through quota share, surplus, risk excess, event excess and aggregate protection. Explain what is allocated, what must reach attachment and what remains retained. Then change the cause or affected locations and reconsider the response.
3. Trace contracts into accounts
Take an illustrative cession from acceptance through premium reporting, claim allocation, cash payment and account reconciliation. Explain how commission, outstanding estimates and earlier receipts affect the records. Resolve each entry by reference to its purpose rather than memorising a net balance.
4. Practise calculations alongside their assumptions
Use the official study material for calculation practice involving proportional allocation, treaty capacity, premium and reinstatement. Before calculating, identify the relevant loss basis, applicable retention, available limit and commission terms. Afterwards, explain why the result fits the contract.
5. Read wording as a set of decisions
For each sample clause, identify what it permits, what it requires and what uncertainty it leaves. Pay particular attention to coverage basis, claims involvement, inuring order and error correction. Avoid importing the effect of a familiar clause into differently drafted wording.
6. Test unfamiliar applications
Answer the scenarios below without consulting the guide, then explain your reasoning aloud. Return to the relevant eBook passage where your answer depends on an unstated assumption. Extend each scenario by changing the exposure, contract basis or administrative record.
Test your understanding
These original learning scenarios are for revision; they are not official examination questions.
1. A large property has been ceded under a surplus treaty and later suffers a modest covered fire loss. Should the reinsurer pay only the loss above the retained insured exposure?
Show answer and explanation
No. Surplus is proportional reinsurance. The accepted allocation of the property’s exposure ordinarily determines how the covered claim is shared. The retained insured exposure helps establish that allocation; it is not an excess-of-loss attachment applied afresh to the claim. Check the recorded cession, amendments and treaty conditions.[1]
2. A storm damages many insured homes, but each individual claim is below the insurer’s per-risk attachment. Could its event excess protection still respond?
Show answer and explanation
Yes, potentially. Event protection combines qualifying losses attributed to the contractual occurrence before applying its attachment and limit. Individual claims need not breach the per-risk attachment. The insurer must establish the event grouping, covered losses, applicable deductions and remaining capacity under the event treaty.[1]
3. The cedent makes a goodwill payment on an excluded claim and points to a follow-the-settlements clause. Is the recovery established?
Show answer and explanation
No. The clause’s wording and applicable law determine its effect, and it does not automatically extend the treaty to excluded payments. The handler must identify a contractual basis for recovery, including any provision expressly addressing such payments, rather than rely solely on the cedent’s decision to settle.[1]
4. A life office reinstates a lapsed policy and increases its benefit. Can the administration team simply reactivate the previous reassurance record?
Show answer and explanation
The team should first check the treaty. Reinstatement and benefit increases may involve reporting, consent or fresh underwriting requirements. Direct policy restoration does not establish identical reassurance protection. The record should reflect the benefit and terms actually accepted under the reassurance arrangement.[1]
5. An insurer suffers severe flood losses, but its parametric protection does not pay because the specified measurement was not reached. Has the mechanism necessarily failed?
Show answer and explanation
Not necessarily. The protection responds to its agreed trigger, which may differ from the insurer’s actual loss. This is an example of basis risk. Assess whether the measurement was applied correctly, then distinguish contractual performance from whether the chosen trigger adequately protected the insurer’s exposure.[1]
Frequently asked questions
What score is needed to pass CRI?
SCI requires at least 40 marks in Part I and 10 marks in Part II, plus an overall score of at least 70 marks out of 100. Meeting the separate part minimums alone does not establish a pass.[1]
What is the examination format?
The examination has 100 multiple-choice questions over 2 hours. Part I has 80 questions, and Part II has 20 questions involving calculations. It is an English-medium, closed-book Computer Screen Examination, with no deduction for wrong or blank answers.[1]
Does this guide cover a programme or a single examination?
It covers the SCI Certification in Reinsurance examination. Its published domains include general reinsurance, life reassurance, office procedure and evolving reinsurance issues. It does not incorporate neighbouring ChFC or other insurance modules.[1]
Which study material should I use?
Use SCI’s applicable CRI eBook and check its Version Control Record. The CRI page includes the edition note for the evolving reinsurance chapter. Neither update notice referenced here lists CRI, so those notices do not confirm a newer CRI edition.[1][2][3]
Can I resit, and are exemptions available?
SCI states that there is no limit on examination attempts and no exemption is granted. Refer to its examination schedule for available sittings.[1]
Does passing produce a certificate document or current CII credits?
SCI states that it issues a result slip and no certificate document. The CRI page also contains a CII credit statement with an expired validity date, which does not confirm current entitlement. Check any present credit arrangement directly with SCI and CII.[1]
Can I use the concepts as definitive interpretations of treaty clauses?
No. They explain general mechanics and common distinctions. Actual clause effects depend on the agreed wording and applicable law. SCI’s public syllabus establishes the subject domains but does not publish specimen clauses or detailed legal rules.[1]
Official sources and review notes
Public IBF and SCI sources were checked on 10 October 2026 for syllabus scope and assessment details, with additional primary references where listed. References identify the relevant syllabus or subject source; explanations and examples are original teaching material. This guide selects important concepts and does not replace the full official study text. Confirm the applicable edition and any updates with the administrator before your assessment.