Important Points for IC 57 - Fire and Consequential Loss Insurance Exam
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The maximum amount of ?risk? (property located in one compound in terms of sum insured or PML) that can be assumed for the own account of an insurer, in respect of single ?risk? is termed the Net Retention Capacity. i) PML Assessment Factors: These can be classified into broad categories as under: i. Technical information; ii. Insurance Information; iii. Third Party Information; iv. Causes of Loss Information
PML error / PML burst generally denotes an actual loss being larger in size than PML estimates.
Reinsurance is an arrangement whereby Direct Insurer who has insured a risk insures a part of that risk again with another insurer, that is to say, reinsures a part of the risk in order to reduce his own liability.
There are two main methods of reinsurance: Facultative and treaty
The main feature of the facultative method is that each risk is reinsured individually.
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