Create Master Agreement

Facultative reinsurance agreements resulting from several cedents ceding the same objects can be more easily handled by use of a master agreement. The master agreement is used as a basis for quick set-up of these types of assumed businesses, as well as easy maintenance of them. The master agreement contains the information common to all of these businesses, including links (such as to the objects covered or to planned protections).

Here is an example of a master agreement:

RISK A

Cedent A10%

Cedent B30%

Cedent C40%

Cedent D20%

All conditions at the master agreement level are reported and copied to the Assumed Business and placed on the Partner Ledger of the master agreement. This lets you define more than one potential cedent, as in the Risk A example, where each has its own share.

The cedent of each Assumed Business must be a subset of the Master Agreement’s potential cedent(s). If you want to change the cedent of a linked business, only the existing potential cedents are available for selection.

The Protection Assignment is also defined at master agreement level. The protection program for a master agreement can close with a total of more than 100%: you can then assign each single assumed business the correct protection. For example:

Master Agreement To Protection Program

OCC FAC 1100%

OCCTTY1100%

Assumed Business 1 To Protection Program

OCCFAC150%

OCCTTY150%

Assumed Business 2 To Protection Program

OCCTTY1100%

…And so on….

Outward Cedent’s Contract Facultative #

An OCCFAC is a hybrid business that is only valid for master agreements. (It is a Fac Protection and an Outward Cedent’s Contract Treaty at the same time.) Because Facultative Protection cannot be assigned more than once, you must then use more than one Fac Protection to protect the same risk (per Assumed Business). In order to avoid this, the OCCFAC has been created. The OCCFAC behaves like a Facultative business, but can be assigned more than once for the same risk. (You cannot assign the same OCCFAC from a master agreement to different risks.)

Master Agreements and Accounting #

All bookings are affected at the master agreement level. Once you close a Technical Worksheet, the system automatically produces Technical Worksheets (open) for linked Assumed businesses and for the relevant RP Fac. (OCCFACs do not have bookings, so you have to go directly to the RP linked to OCCFAC.) For the OCCTTY, the behaviour remains unaltered. (To obtain bookings at the RP level, you have to run a Retrocession Calculation Order.)

The same applies for Claims. At master agreement level, the system copies the claim to the linked Assumed business. Claims bookings are affected directly at the master agreement level.

Master Agreements and Amendments #

Amendments are generated at the master agreement level and copied from there to the linked Assumed business and to the OCCFAC (RPFAC).