Hi, In the case of endowment assurance with an Original Terms reinsurance arrangement, would the reinsurer have to pay out part of the maturity value or would they just pay out on death? Similarly if there was a Risk Premium arrangement in place based on the sum assured would the reinsurer again pay out on maturity? Finally if there was a Risk Premium arrangement in place based on sum at risk and the sum at risk at maturity was positive (say due to mismatching of assets and liabilities and assets under performing) would the reinsurer have to pay out? Thanks, Max
Hi MLC, For OT, as you are paying the reinsurer a part of your original (gross) premium, then the reinsurer will pay a part of all claims, including the maturity and surrender values (although I don't think it's very common to use OT for endowments). Risk premium only cedes the mortality risk and so wouldn't pay out on maturity, whether based on the sum assured or the sum at risk. Hope that helps
