Botswana insurance Company (BLI) entered into a surplus share treaty with Botswana Life insurance limited...
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Botswana insurance Company (BLI) entered into a surplus share treaty with Botswana Life insurance limited (BLIL). The retention limit of BLI is set at P150 000.00 which is equivalent to one line of cover. BLIL agreed to reinsure up to an amount of P900 000.00 or six lines of cover. Three scenarios below occurred between them:
- Botswana insurance Company wrote a property insurance policy amounting to P80 000.00 and a loss amounting to P25 000.00 Occurred
- Botswana insurance Company wrote a property policy amounting to P450 000.00 and a loss of P60 000.00 occurred
- Botswana insurance Company wrote property insurance amounting to P750 000.00 and a loss amounting to P90 000.00 occurred.
Required:
Determine the portion of insurance that each company would be responsible for in the three scenarios above [9 marks]
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