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LeoGlossary: Surplus Lines Treaty (Insurance)
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A type of reinsurance under which bands of cover known as lines are granted above a given retention which is referred to as the cedant’s line. Each line is of equivalent size and the capacity of the treaty is expressed as a multiple of the cedant’s line. The reinsurer receives an equivalent proportion of the full risk premium. A surplus treaty is a form of proportional reinsurance.
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