• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Deposits Back

A

Aubameyang

Member
Why do the notes only mention deposits back under an original terms arrangement?

Could the reinsurer's share of the reserves not also be deposited back under a risk premium arrangement?

Thanks
 
Hi

This question was previously asked in the SP2 forum. You can find the answer from one of the tutor's here:
https://www.acted.co.uk/forums/index.php?threads/reinsurance-deposits.14639/

To summarise, whilst it is possible with either type of reinsurance, for risk premiums policies, the premiums paid by the insurer to the reinsurer are generally reviewed each year. The reinsurer will only therefore have to hold reserves for the next year of potential claims. So, the reinsurer is not holding significant reserves for risk premium policies and there is not really much to 'deposit back'. However, original terms are covered or much longer terms and therefore the reinsurer will hold reserves for the whole period of reinsurance and reserves could be significant. Therefore there is more reserve to 'deposit back' for original terms reinsurance.

I hope this helps.

Kind regards
Sarah
 
You must log in or register to reply here.
Back
Top