Handle Reserve Conditions

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Reserve Condition button | When a business agreement includes Premium and/or Loss Reserve conditions, the details of these conditions can be entered in the Reserves Conditions window. |

Dependent on the Level-and Type of Business the conditions entered are for information only, or basis for further calculations performed, e.g. by a Retrocession Calculation order.

When an Assumed Business and/or an Administration Business are placed from a Cedent’s Contract, they inherit Premium- and Loss Reserve conditions of the Cedent’s Contract. You are not allowed to override the inherited conditions.

The businesses defined in the Placement window of an Outward Cedent’s Contract business, i.e. Retrocessionaire’s Participation and Intermediary Placement, inherit the Premium- and Loss Reserve conditions of the Outward Cedent’s Contract. It is not allowed to override the Reserve Conditions from the placement businesses.

Define that Reserves are to be transferred to next Insured Period #

For Proportional Treaty Outward Cedent’s Contract it is possible to register that the Premium/Loss Reserve must be transferred to the next open Insured Period. This option is available only when Premium/Claim Accounting Basis is Clean Cut

1. Open the Business for which Reserve Conditions are to be defined
2. Click the Reserve Conditions button (RS button) on the Navigation bar
3. If required, click the Edit button
4. Select Transfer to next Insured Period check box
5. Continue selecting the Calculation Method etc.

Enter Premium Reserve Conditions #

You can select between different Premium Reserve Calculation Methods. Additional conditions, i.e. percentage and calculation basis, are required for most of the methods.

The Calculation Methods available for Premium Reserves depend on the Level- and Type of Business. For Outward Cedent’s Contract Treaty business, the conditions are basis for further calculations, e.g. when running Retrocession Calculation orders.

(For information about each calculation method and how the Premium- and Loss Reserves are calculated for Proportional treaties, refer to Calculate Reserves.)

Define Premium Reserve Conditions as Percent of Original #

When the Premium Reserve is calculated based on the reserves originally ceded to the business, you select ‘Percent of Original’ as method.

1. Open the Business for which Premium Reserve Conditions are to be defined.
2. Click the Reserve Conditions button (RS button) on the Navigation bar.
3. Select Percent of Original from the Calculation Method drop-down list.
4. Select Calculation Frequency and enter a Percentage value.
5. Click Save first time you make the entries, or OK if you are in Edit mode.

Define Premium Reserve Conditions as Percent of Premium #

When the Premium Reserve is calculated using the agreements Premium as basis for the calculations, you select ‘Percent of Premium’ as calculation method.

1. Open the Business for which Premium Reserve Conditions are to be defined.
2. Click the Reserve Conditions button (RS button) on the Navigation bar.
3. Select Percent of Premium from the Calculation Method drop-down-list.
4. Select Calculation Frequency, enter a Percentage value and select Premium Basis.
5. Click Save first time you make the entries, or OK if you are in Edit mode.

Define Premium Reserve Conditions for Bond- and Credit business #

For some businesses, i.e. Bond- and Credit Business, a predefined table determines the calculation of Premium Reserves. (Refer to the Business System Parameters documentation in the System Administrator’s Guide.)

1. Open the business for which Premium Reserve Conditions are to be defined.
2. Click the Reserve Conditions button (RS button) on the Navigation bar.
3. Select Percent Table from the Calculation Method drop-down list.
4. Select Calculation Frequency, Type of Business and Premium Basis.
5. Click Save first time you make the entries, or OK if you are in Edit mode.

Define Premium Reserve Conditions as Original Deduction Reserve #

When you want to calculate an Original Deduction Reserve for Outward Business you define these conditions.

1. Open the business for which Premium Reserve Conditions are to be defined.
2. Click the Reserve Conditions button (RS button) on the Navigation bar.
3. Select Calculate Deduction on Cost from the Calculation Method drop-down list
4. Select from, or enter values in the additional condition fields.
5. Click Save first time you make the entries, or OK if you are in Edit mode.

Define Premium Reserve Conditions according to Division Method #

When the Premium Reserve of the agreement is calculated according to a certain division formula, you use this condition.

1. Open the Business for which Premium Reserve Conditions are to be defined.
2. Click the Reserve Conditions button (RS button) on the Navigation bar.
3. Select Division Method from the Calculation Method drop-down list
4. Select Calculation Frequency, Premium Basis and Division Method from the respective drop-down lists.
5. Click Save first time you make the entries, or OK if you are in Edit mode.

Define Premium Reserve Conditions as Pro Rata Temporis #

When the Premium Reserve of the agreement is calculated according to the method Pro Rata Temporis, you use this condition.

1. Open the Business for which Premium Reserve Conditions are to be defined.
2. Click the Reserve Conditions button (RS icon) on the Navigation bar.
3. Select ‘Pro rata Temporis’ from the Calculation Method drop-down list
4. Select Calculation Frequency and Premium Basis from the respective drop-down lists.
5. Click Save first time you make the entries, or OK if you are in Edit mode.

Enter Loss Reserve Conditions #

Dependent on the Level- and Type of Business the conditions entered are for information only or used as basis for further calculations, e.g. by running a Retrocession Calculation order.

(For information about each calculation method and how the Premium- and Loss Reserves are calculated for Proportional treaties, refer to Calculate Reserves.)

Define Loss Reserve Conditions as Percent of Original #

When the Loss Reserve is calculated based on the reserves originally ceded to the agreement, you select ‘Percent of Original’ as calculation method.

1. Open the Business for which Loss Reserve Conditions are to be defined.
2. Click the Reserve Conditions button (RS button) on the Navigation bar.
3. Select Percent of Original from the Calculation Method drop-down list
4. Select Calculation Frequency from the drop-down list and enter a percentage value.
5. Click Save first time you make the entries, or OK if you are in Edit mode.