The Interlocking Claim is a claim that can be linked to more than one Insured Period. The interlocking clause is recorded on the Claim condition and states that the limits should be recalculated in the same proportion as the year’s loss bears to the whole. In other words, the limits are proportionally reduced. Since the limits will be reduced according to a proportional split it is important to know the loss amount that affects all involved years. ...
In order to calculate the Non-Proportional XL Recovery Calculation you need to indicate that the claim is either a single loss, or part of a Headline Loss. Claims protected by a US Quota Share treaty do not need to be flagged as single claims, or Headline Losses; they are all subject to the simplified recovery calculation. The claims must also contain a link to the relevant proportional US Quota Share and/ or non-proportional XL protections under which it may be recoverable. ...
When your claim is linked to at least one non-proportional protection, the system allows you to view which non-proportional protections may be relevantfor the claim. (Whether the claim is actually recovered from the listed OCCs or not, and by which amount, obviously depends on a number of factors, such as annual aggregate limit, claims affecting the insured period, and so on.) Open the claim for which you want to view the potential protections Open the claim’s Links tab Open the Protection Assignment Select one of the linked protections, and select Visualize Non-Prop XL Protections from the pop-up menu The system opens a graphical presentation of the potential protections The presentation is an overview of the directly linked protections, and those which are linked through Inuring to Benefit rules Through Top and Reinstatement Exhausted. ...
Non-Proportional Facultative # If your business is covered by a non-proportional facultative protection, you must either set the indicator “Include in Recovery Calculation” or link the claim to a Headline Loss. The link to the protection is however unnecessary. The claim is automatically linked to the Non-Proportional Facultative Protection. The calculation is initiated from the Business Claim List of the Assumed Business. For further details refer to the Recovery Calculation chapter. ...
The way accounts are handled varies for the different types of business. Facultative, Direct and Non-Proportional business generally provide more extensive loss details and separate accounts for claims and premiums. Proportional treaties on the other hand are often accounted for on a regular basis, and both claim and premium items are included in these accounts. There is often a high frequency of losses, and no or few details provided. Separate details are generally provided for the major market losses so that losses can be created and recoveries, if any, be made. ...
General information # The From Ground Up (FGU) functionality is specifically designed to handle claim accounting for claims that affect more than one layer, or a program of treaties. It allows you to register claim figures as they affect the cedent in the FGU Advisory (that is figures including the excess point/retentions), as well as details about Policy Deductible, Co-insurance, Reduction, and which interest calculation method that apply. The system will perform a calculation and distribution of the claim across the affected businesses, considering: ...
The FGU Advisory contains the loss figures as advised by the cedent or insured, and is therefore the basis for all calculations and distribution. When you click the FGU tab, you see the latest FGU Advisory Figures in the upper part of the window, and the latest suggested distribution in the bottom part of the window. In addition, there is a Display Option and an Index Calculation Indicator. Display Option: The display option refers to the distribution list and provides you with three alternatives. ...
Based upon the Advisory Figures and inuring recovery (described later in this chapter), the system will suggest a distribution of the claim figures to the linked sections. The system will determine the “boundaries” for each linked section, that is the cover amount and excess point, and also determine whether the claim figures should be recalculated. Finally conditions like cost clause, interest clause, franchise deductible, and annual aggregate deductible will impact how the FGU Advisory Figures are distributed. ...
The FGU functionality calculates the distribution for multiple currency claims. Note that a claim is considered as a multiple currency claim when there are more than one currency listed in the Advisory section, even though no advisory figures have been registered. When calculating the distribution of a claim in multiple currencies, the system applies the following rules: Paid Loss is calculated using the Paid Loss split between the currencies. If expenses are Part of Liability, the Paid Expenses are calculated using the same split. ...
The Cover Basis “Net After Proportional Protections” on the Limit condition of a Non-Proportional Treaty indicates that the treaty is covering the retention of a quota share. The Cover Basis percentage indicates the retained percentage. The From Ground Up calculation will take both these into consideration when registered. Cover Amount on Limit /Cover Basis % = Cover Amount applied in FGU Excess Amount on Limit/Cover Basis % = Excess amount applied in FGU ...