Answer-What is a quota share treaty?

In a quota share treaty, the insurer cedes a fixed percentage of every risk to the reinsurer. Both the premium and the losses are shared proportionally between the insurer and the reinsurer.

Question

What is a quota share treaty?

A A proportional reinsurance treaty where the insurer cedes a fixed percentage of every risk.

B A type of non-proportional reinsurance

C A reinsurance treaty that covers losses in excess of a certain amount

D A reinsurance treaty that covers the insurer's total losses in a given year.

E None of the above

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What is a quota share treaty?

Solution