Hello Can someone please explain the following part of the solution: "The RITC is premium paid by a syndicate to reinsurer the outstanding liabilities. It is usually paid at the end of 3 years to another party, usually the same syndicate but in the next open year of account." So, is the RITC paid to the reinsurer or to the same party ie the syndicate? Second sentence seems to contradict the first.
Best guess: I think they meant "to reinsure the outstanding liabilities". So it's a typo, i.e. reinsure, not reinsurer. Hope it helps.
Thanks iActuary But the notes (well) seem to indicate that the first sentence is correct ie the RITC is paid to reinsurer.
Sorry, not brilliantly worded! At the end of the three years, the syndicate transfers its outstanding liabilities to someone else, by using RITC. That somebody else could be a different syndicate or other reinsurer, but is more likely to be the same syndicate just 'one year ahead' (which may or may not have different members now).
