Q14
For i. Risk attaching reinsurance treaty where underlying policies all have 12-month coverage periods
if the question is loss-occuring reinsurance treaty, it shall be applying PAA method as coverage period is 1 year only.
what if Risk attaching reinsurance treaty where underlying policies all have 6-month coverage periods ?
Comments
yes, but you'd be hard pressed to find any policies with 6 month coverage periods tho
What do risk attaching and loss occuring reinsurance contracts mean?
risk attaching means the reinsurer assumes all risks written in a given period. Loss occurring means that the reinsurer only covers losses that occur during a given period
For iii., can I focus on the fact that coverage period of commercial auto > 1 year, rather than "new market"? or "new market" alone is a reason that GMA needs be used? If so, why?
Problem is that just saying commercial auto has a coverage period of > 1 year does not preclude the usage of the PAA, so it would not work. You need to explain the reasoning behind why GMA is more appropriate which is where you then talk about the new market