Non-Proportional Recovery System

SICS lets you automatically calculate Recoveriesby using the Non-Proportional Recovery System. Recoveries can be calculated on following levels: Protection Program, Single Outward Cedent’s Contract, XL CA Of Outward and Non-Proportional Facultative Protection. A simplified recovery calculation can also be made for proportional treaty Outwards Cedent’s Contract of type US Quota Share.

For Single OCC’s and OCC’s being linked to a Protection Program, system also calculates recovery on Sub Sections. The system will calculate recovery on the lowest Sub Section level of the OCC that matches the inward claim’s scope of cover.

However, it is still recommended that the protection assignment at claim level is performed against the Main Section of the OCC.

The recovery calculation is built up around the assumed claim, and the structure of the outward non-proportional and US Quota Share protections. It is therefore important to set up the system correctly in order to calculate your recoveries automatically.

Recovery Calculation for Protection Program #

The Protection Program must be registered for your base company and sectioned in accordance with the company’s protection structure. For example, if the base company has separate protections for their marine business and their property business, it would establish two sections - one marine and one property Section. Each Section of the Program should include a link to the Non-Proportional treaties existing for this part of the business. One or more US Quota Share treaties may be included in the proportional part of the program structure. Refer to the Protect Business Reinsurance chapter,Create a Protection Program section for more information.

Recovery Calculation for Single OCC #

The recovery calculation for Single Outward Cedent’s Contract (OCC) is initiated from the OCC instead of from the Protection Program. Single OCCs are not linked to any Protection Program Section. If there is more than one Single OCC and these are structured in layers, this option is not recommended. To ensure correct recovery calculation in this case, use the Recovery Calculation for Protection Program.

Recovery Calculation for XL CA Of Outward #

Excess of Loss protection for outward business is in some cases offered to proportional Retrocessionaires as an additional protection for large losses. The participants of the outward proportional treaty can decide to accept or decline the offered protection. The recovery calculation for XL CA Of Outward (XLCA) automates the calculation of recoveries for common account protections and is initiated from the XLCA Claims List or Find Accounting Order window.

Recovery Calculation For XL Fac #

Recovery Calculation for XL Fac makes it possible to calculate recovery automatically for non-proportional facultative protections. This facility handles Assumed Business with realized Non-Prop Facultative Retrocessionaire(s).

The basis for calculating recoveries is assumed claims (including Cession Claims / Declaration Claims), and the result is booked as technical worksheets at retrocessionaire level; with a link back to the source assumed claim.

The Recovery Calculation for US Quota Share is a simplified form of the Single OCC recovery calculation. It is simplified because not all the typical non-proportional calculations are relevant for a proportional treaty; for example indexation and annual aggregate deductible. Also, not all the Inuring to benefit rules are supported. The calculation calculates the impact to the US Quota Share treaty, and generates the preliminary bookings on the Outwards Cedent’s Contract. The recovery calculation must be run prior to the proportional accounting. The calculation is initiated from the US Quota Share Claim List.

Quota Share Recovery Calculation examples are found in chapter ‘Appendix A - Non Proportional’.

Base Company Recovery Calculation #

The recovery calculations sorts the source claim details using the source detail’s as of date, and then calculates the amounts towards retention, annual aggregate deductible, cover, reinstatement exhausted, or through top, in that sequence. If an OCC protects more than one Base Company, this sorting may result in an “unjust” distribution of recoveries across base companies, as one Base Company’s claim may be mostly or entirely allocated towards the retention, and receive none of the recoveries. An option to calculate adjustments to the already calculated recoveries using each Base Company’s share of the Incurred Claim as the basis, is therefore available. The adjustments are made directly on the Retrcoessionaires' Recovery Details. The Base Company Recovery can be created directly from the OCC Claim List, from the XL Part of a Protection Programme, through an order, or as a scheduled job. The ordinary recovery calculations should have been calculated and booked prior to the Base Company Recovery Calculation.