Recovery Calculation for US Quota Share

A US Quota Share treaty is a proportional protection where claim recoveries are calculated based on individual claims or headline losses; i.e. with a claims handling similar to non proportional treaties (ex A).

The protection allocation towards a US Quota Share will NOT vary depending on assumed liability and available protection - it is always set to ceded (QS) %. Claims created on the inward business insured period will inherit the policy US Quota Share Protection. For the US Quota Share with cover basis “Net After Underlying Quota Share” the Net Ceded % is calculated and used as retroceded percentage (ex B).

When the US Quota Share is net of Non Proportional Protections; claims linked to inward business which has non proportional inuring protection must have their US Quota Share assignment removed, and the claim Auto Protection allocation must be set to “No”. (ex C).

Example A: US Quota Share Gross Recovery

Program is set up with US Quota Share and no other proportional treaties in the same proportional treaty part.

Example B: US Quota Share Net after underlying US Quota Share

Program is set up with US Quota Share in program child section, and then US Quota Share (with Cover basis “Net after underlying Quota Share”) at Main section level of the Protection Program. Note that the US Quota Share limits are the same for both.

Example C: US Quota Share Net of Non Proportional protections

When US Quota Share is net after non proportional fac protections and/or non-proportional treaty protections, the initial claim protection allocation must be to the protection which comes first. This protection must in turn have inuring to benefit conditions set to the protection it is recovered under next. This could be the US Quota Share, or another protection which comes in between.

The last ITB conditions must be linked to the US Quota Share, to ensure net recoveries can be calculated. Defaulted ITB % is 100%, but if the QS % is different from 100% the ITB % must reflect the same.