1. Sunset Property Insurer has a surplus-share reinsurance treaty with Landon Reinsurer. Sunset has a retention limit of...

1. Sunset Property Insurer has a surplus-share reinsurance treaty with Landon Reinsurer. Sunset has a retention limit of $300,000 on any single building, and up to 6 lines of insurance may be ceded to Landon Re.

What is the maximum amount of insurance that Sunset can write on a single building under the reinsurance agreement? (1 point)

b. A building valued at $1,500,000 is insured with Sunset. A fire causes a $750,000 loss to the building. How much will Sunset pay? How much will Landon Re pay?

Expert Solution

Summary of answer:

Any risk above the retention limit will be ceeded to reinsurer under the surplus share treaty reinsurance arrangement.Direct insurer will be having the benefit of sharing the pre fixed risk amount in this treaty.

jeff jeffy answered 2 years ago

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