In Diamond, this process allows users to add a treaty to cover a specific line of business. Users can also copy an existing treaty to a new treaty, edit and / or delete a treaty. All of the contract information and at least one (1) layer is needed to save the treaty contract.
From the Company Configuration Tool / Reinsurance Tree View, select Treaty; click Add to display the Add Treaty screen.
On the Add Treaty screen, make the following entries and selections:
Contract Name: Enter the name of the contract.
Limit: Enter the maximum amount of liability of the reinsurer.
Termination Method: Method in which treaty will be terminated as stated in the conditions of the treaty; select from the combo box.
Status: The current position of the treaty in question; select from the combo box.
Reinsurer: Enter the name of the corresponding reinsurer.
Contract Number: Enter the corresponding contract number.
Effective Date: The date the treaty begins; format entry M/DD/YYYY.
Expiration Date: The date the treaty ends; format entry M/DD/YYYY.
Expansion Date: Time limit amount over and above the Expiration Date the treaty would be extended to.
To split the reinsurance treaty into different
layers for different limits, click the Add
button in the Layers section:
On the Treaty Layer screen:
Layer Number: Number of layers in an excess loss agreement / session over and above the insurer's retention.
Contract Type: Select the type of contract from the combo box.
Layer Retention: The insuring company's participation level; dollar amount.
Layer Limit: Reinsurer's limit on the treaty; dollar amount.
Reinsurer Liability: Amount of liability per each reinsurer within that layer.
Layer Aggregate Limit: Total amount of the layer (i.e., most the reinsurer will pay in the time of the loss).
Once the layer
has been set up, add the participants that will share the coverage
of that layer in the Participant Info section:
(Note: The participants
cannot overlap. There can be many or just one company covering the
treaty layer.)
Reinsurer Name: Select from the combo box.
Layer Percent: This is a percentage of premium and loss within a specific layer that is divided among more than one reinsurers in that layer
Ceded Commissions (Percent): This is the allowance being made by the reinsurance company for part or all of a ceding company's acquisition and other costs. (Note: The ceded commission may also include a profit factor for the insured.) If applicable, enter a percent on the treaty.
Premium Percent: Enter the percentage of gross premium on every eligible policy written, payable on a gross amount to the reinsurance treaty.
Deposit Premium (Percent): A percentage of the estimated annual projected premiums for that line of business.
Minimum Premium Percent): Amount the insurance company will pay if annual premiums fall short of the estimated annual projected premium.
Save
The Treaty Coverages Info section allows the selection of the company / state / LOB that will be covered under the treaty:
Company / State / LOB: Select the company / state / LOB being covered by the treaty.
Available / Selected Coverages: Select a coverage covered under the treaty and click the right arrow (->) to move it into the Selected Coverages. Repeat for each coverage that will be included.
Save
Special Note: Participants, layers and coverages can be edited and / or deleted.
To copy an existing Reinsurance Treaty to a new Reinsurance Treaty:
Highlight the existing treaty on the Reinsurance List View screen.
Select Copy at the top of the toolbar.
When the Add Treaty screen displays with the treaty being copied from make any necessary changes, such as Treaty Name, Reinsurer's Name, Company, State, Line of Business and any ASL Coverages.
At the bottom of the screen, should you wish to make any changes to the Layer assigned to the reinsurer being copied from, click Edit.
Make your changes on the Treaty Layer screen.
Click Save to retain your changes.
Once all new information has been entered, click Save once again to place the "new" or "copied" reinsurer on the Reinsurance List View screen.
To edit a treaty:
Highlight the treaty in the Data Grid.
Select Edit.
When the Edit Treaty screen displays, make your changes.
Click Save.
To delete a treaty:
Highlight the treaty in the list view.
Select Delete.
No prompt is returned; the treaty is removed from the Data Grid immediately.