Distribute RP figures on Multiple Effective Periods

Distribute RP figures on Multiple Effective Periods

Normally, the retroceded figures are distributed to the Retrocessionaire Participations according to the RP share registered on the newest Effective Period within the Insured Period. In some situations, it is necessary to use the share registered for multiple Effective Periods e.g. when a RP ends the participation during an Insured Period and the corresponding share percentage is recorded for a new RP/increased for an existing RP. Distribution of RP figures to the various Effective Periods is dependent on the system parameter Distribute RP Figures on Multiple Effective Periods being active. The Claim Basis (Claims Conditions) registered on the Outward Cedent’s Contract have impact on how the retroceded figures are distributed to the RPs.

Only original booking (premium, loss etc.) are distributed according to share registered on the various Effective Periods. Calculated items (premium reserve/-deposit/-portfolio etc.) are calculated using the share from the newest Effective Period of the Insured Period.

Note! The ‘Placement Completed’ flag must be set on the Insured Period of the OCC to be able to run the Retrocession Calculation order. This flag can only be set when the total retroceded share for every Effective Period within the Insured Period is equal 100% / total Units entered on the OCC. Because of rounding rules applied at share calculation, a total value of 99,9999950 to 100,0000049 is accepted as 100.

Distribute RP figures on Multiple Effective Periods when Claim Basis = Losses Occurring #

  1. Select the field Claim Basis = ‘Losses Occurring’ on OCC Claims condition (Refer to Handle Claims Conditions)
  2. Make bookings on source business protected by the OCC
  3. Amend the signed share for some RPs
  4. Create and Run the Retrocession Calculation order

The system will do the following;

Premium related items;

  • The system will use the Accounting Period From - To of the OCC as Booking details to find the RP share to be used in the calculation;
  • The Accounting Period From - Toof the OCC as Bookingdetail is compared with the RP Share registered for the Effective Periods of the corresponding Insured Period as the OCC detail. When system finds one or more Effective Periods which is within the Accounting Period From - To, this share is used in the calculation.
  • The OCC as Booking detail is multiplied with the share for the first Effective Periods within the Accounting Period and split according to the number of days in the Effective Period in proportion to the total number of days in Accounting Period From - To. Then system is using the share for the next Effective Period until the end of the Accounting Period From - To is reached.

Formula;

Premium related details OCC as Booking x RP% Effective Period 1 x ((number of days in Effective Period 1 within days in Acc Per From-To) / (total number of days in Acc Per From-To)

Premium related bookings OCC as Booking x RP% Effective Period 2 x ((number of days in Effective Period 2 within days in Acc Per From-To) / (total number of days in Acc Per From-To)

Example

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Loss related items;

  • The system is copying the ‘Date of Loss’ (coming from source business) to the OCC as Booking detail.
  • The Date of Loss of the OCC as Booking detail is checked against the RP Share of the matching Effective Period
  • If Date of Loss is less than the RP Share Effective Period End Date + 1 day and the Date of Loss is greater that the RP Share Effective Period Start Date - 1 day, then the system is using Claim detail amount x RP Share.
  • If not, system is checking the next Effective Period and the RP share from that period are used.
  • If Date of Loss is not present on the Claim booking detail, the booking detail is treated as if it is a premium related detail.

Example:

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Distribute RP figures on Multiple Effective Periods when Claim Basis = Claims Made #

  1. Select the field Claim Basis = ‘Claims Made’ on OCC Claims condition (Refer to Handle Claims Conditions)
  2. Make bookings on source business protected by the OCC
  3. Amend the signed share for some RPs
  4. Create and Run the Retrocession Calculation order

The system will do the following;

Premium related items;

  • The system will use the Accounting Period From - To of the OCC ‘as Booking’ details to find the RP share to be used in the calculation
  • The Accounting Period From - Toof the OCC as Booking detail is compared with the RP Share registered for the Effective Periods of the corresponding Insured Period. When system finds one or more Effective Periods which is within the Accounting Period From - To, this share is used in the calculation.
  • The OCC as Booking detail is multiplied with the share for the first Effective Periods within the Accounting Period and split according to the number of days in the Effective Period in proportion to the total number of days in Accounting Period From - To. Then system is using the share for the next Effective Period until the end of the Accounting Period From - To is reached.

Formula;

Premium related details OCC as Booking x RP% Effective Period 1 x ((number of days in Effective Period 1 within days in Acc Per From-To) / (total number of days in Acc Per From-To)

Premium related bookings OCC as Booking x RP% Effective Period 2 x ((number of days in Effective Period 2 within days in Acc Per From-To) / (total number of days in Acc Per From-To)

Example

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Loss related items;

  • The system is copying the Claims Trigger Date (coming from source business) to the booking detail on the OCC as Booking.
  • The Claims Trigger Date of the OCC as Booking detail is checked against the RP Share of the matching Effective Period
  • If Claims Trigger Date is less than the RP Share Effective Period End Date + 1 day and the Claims Trigger Date is greater that the RP Share Effective Period Start Date - 1 day, then the system is using Claim detail amount x RP Share.
  • If not, system is checking the next Effective Period and the RP share from that period are used.
  • If Claims Trigger Date is not present on the Claim booking detail, the booking detail is treated as if it is a premium related detail.

Example

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Distribute RP figures on Multiple Effective Periods when Claim Basis = Risk Attaching or <None> (i.e. when not defined) #

  1. Select the field Claim Basis = ‘Risk Attaching’ on OCC Claims condition or leave it blank (Refer to Handle Claims Conditions)
  2. Make bookings on source business protected by the OCC
  3. Amend the signed share for some RPs
  4. Create and Run the Retrocession Calculation order

The system will do the following;

Premium and Loss related items;

  • The system will check if the Insured Period From Date of the source (AB) booking detail is within one of the Effective Periods of the RP Insured Period.
  • If the Insured Period From Date of the source booking detail is within one of the Effective Periods of the RP’s Insured Period, the system will use the RP share from this Effective Period.
  • If the Insured Period From Date of the source booking detail is not within one of the Effective Periods of the RP’s Insured Period, the system will not make any booking to this RP.
  • System will check the next RP on the OCC Placement list until all are checked.

Example

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Note! There will neither be a portfolio withdrawal/entry nor a reversal of reserves when a participation is ended during an Insured Period. Portfolio calculation/reversal of reserves is only performed in the last Account of the Insured Period.