Question about Capping: Schedule F, Battle Quiz 4, Calculation Problem
In the hints below this calculation problem, it says that the RP for AUTHORIZED Reinsurers is capped at T (for both slow-paying and not slow-paying). Based on my reading of the source material, I think this capping only applies to Unauthorized Reinsurers.
Could someone clarify this?
Maybe it's a moot point, since the RP for Authorized Reinsurers is usually on the low end anyways.
Comments
I will look into this and get back to you.
Answer: You are correct and I have removed the reference to the capping for authorized reinsurers. I believe you are also correct that it's moot since according the formulas, the provision should never exceed the value of T anyway. Thanks!