70-433 Concerns And AnswersThis section of sample problems and options is a component of The Actuary's Free Study Manual for Exam six, authored by Mr. Stolyarov. This is Section four of the Study Manual. See an index of all sections by following the hyperlink in this paragraph.
When there are numerous reinsurance treaties, one treaty can inure to the advantage of an additional treaty by being applied to the loss quantity first, possibly reducing what the other treaty would need to pay.
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If a loss of $22 million occurs and the quota share treaty inures to the advantage of the disaster treaty, what is the liability of (i) the quota share treaty, (ii) the disaster treaty, and (iii) the primary insurer?
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