Loss Treaty
What is spread of loss treaty.
Loss treaty. The reinsurance company is held responsible for the total amount of losses above a certain limit. In the latter the originating insurer accepts the risk of loss up to a stated amount and above this amount the reinsurers divide any losses. The approach of excess of loss treaty reinsurance arrangement is quite different here from other methods. A type of reinsurance wherein losses are spread over a five year period with little or no risk trans.
A form of reinsurance providing excess of loss cover for losses arising from any one event or vessel in excess of the reinsured s retention up to an agreed limit but only when the aggregate of claims otherwise recoverable under the excess of loss treaty exceeds a stated amount. Under this system unlike facultative quota or surplus the sum insured does not form any basis and it is not expressed in terms of proportion or percentage of the sum insured. Other articles where excess of loss treaty is discussed. Although the law of the sea treaty lost would threaten american sovereignty by giving the un control of the oceans ratification of the treaty is still a top priority of the obama administration.