Credit Provision
May I know what this Credit Provision is for? It seems that the Provision is set for Insurer, but dont know how it can be applied and used. Thanks
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May I know what this Credit Provision is for? It seems that the Provision is set for Insurer, but dont know how it can be applied and used. Thanks
Comments
It is to provide for credit risk on the reinsurer's end (i.e. they may not be able to provide compensation for their assumed losses)
I see, if Reinsurer cannot provide compensation, then it is a Credit Risk to Reinsured.
So this is a Credit Risk Provision to the Reinsured.