Reinsurance Regimes

Introduction

The Reinsurance Regimes feature allows users to manage reinsurance rules separately from benefit rules. This separation simplifies the claims adjudication process. It makes the process easier to understand, maintain, and apply reinsurance logic during claim processing.

This chapter explains how to set up, configure, and use the reinsurance regimes effectively.

Basic Concepts

What is a Reinsurance Regime?

A reinsurance regime defines the structure for sharing risks between an insurer and a reinsurer. It acts as a container for rules that specify:

  • How much risk the insurer retains (Retention Amount)

  • How much risk is ceded to the reinsurer (Ceded Amount)

  • The order and conditions under which reinsurance rules apply

The system applies reinsurance regimes after benefit regimes, post-coordination of benefits. This ensures the payer’s liability is calculated before reinsurance splits are applied.

Also, reinsurance regimes are separated from coverage regimes to introduce a modular, layered approach, and making complex scenarios easier to manage and maintain.

Key Terminology

  • Reinsurance Treaty: A formal agreement between an insurer and a reinsurer defining how risks and claims are shared.

  • Retention Amount: The final amount the insurer pays after reinsurance splits (For example, $70 out of a $100 claim).

  • Ceded Amount: The amount paid by the reinsurer (For example, $30 out of a $100 claim).

  • Reinsurance Input Amount: The initial covered amount used as the basis for reinsurance calculations, determined by claim line coverages with the Counts Towards Reinsurance Input Amount checkbox set to true.

  • Layered Reinsurance: Multiple treaties are applied sequentially, further splitting shares among parties.

Reinsurance Regime, Reinsurance Rules, Categories, and Labels

Reinsurance Regime, Reinsurance rules, categories, and labels form the foundation for applying risk-sharing logic. Follow these tables to understand and configure them.

Reinsurance Regime

Table 1. Reinsurance Regime Fields
Field Description

Code

Unique identifier of the reinsurance regime. This value is referenced by reinsuranceRegimeCode in the enrollment response.

Description

User-friendly description used in the UI and for reporting.

Dynamic logic condition

Optional. Boolean dynamic logic that determines whether the regime applies. If the condition returns true, the system executes the regime. If it returns false, the system skips the regime.

Active

If set to No, the system does not execute the regime, even if a treaty references it.

Reinsurance Regime Rule

Table 2. Reinsurance Regime Rule Fields
Field Description

Sequence

Order in which the system applies rules within the reinsurance regime.

Action

Specifies whether the rule outcome is Cover (retained by the payer) or Withhold (ceded to the reinsurer).

Percentage

Specifies the percentage applied by the rule.

Of coverage label

Specifies the base amount for the percentage calculation. Typical values include Reinsurance input amount, Retention amount, or a configured coverage label.

Subject (Retention amount/label)

Specifies where the system applies the result of the rule. Supported values are:

  • Retention amount, or

  • Label (a specific coverage label)

Apply-to label

Required only when Subject is set to Label. Identifies the coverage label that receives the rule result.

Category

Specifies the cover/withhold category used by the rule. The category determines which coverage labels the system uses to store the retained and ceded portions of the rule outcome.

Retain label

Specifies the coverage label code used to store the retained portion of the outcome for the selected category (for example, a label with action Cover).

Reinsure label

Specifies the coverage label code used to store the ceded portion of the outcome for the selected category (for example, a label with action Withhold).

Message

Optional user-defined message displayed on the claim line when the rule produces a non-zero result. System-specific messages are not allowed.

Substitution parameters for the message:

  1. The final amount after the reinsurance rule is applied, followed by a space and the currency code.

  2. The covered or withheld percentage specified by the rule or derived from the treaty parameter.

  3. The type of rule (action) — either Cover or Withhold.

  4. The description of the reinsurance regime associated with the rule.

  5. The description of the treaty and its sequence number are used for this rule application.

  6. The coverage label displays the name applied by the rule.

  7. The product description.
If there is more than one rule, each rule is applied in the order specified by the sequence.

Cover Withhold Category

Table 3. Cover Withhold Category
Field Description

Code

Identifier of the category.

Cover Label

After a Reinsurance Rule with this cover withhold category is applied, this is the label that is associated with that part of the amount that is covered.

Withhold Label

After a Reinsurance Rule with this cover withhold category is applied, this is the label that is associated with that part of the amount that is withheld.

Limit Fields

Table 4. Limit fields (reinsurance)
Field Description

Code

Unique identifier of the limit. Treaties can reference this value through the enrollment payload (for example, productTreatyParameters.limitCode).

Description

Short internal description of the limit (for example, Reinsurance retention limit or Excess of loss limit).

Display name

Name displayed in the UI.

Action

The limit action. For reinsurance limits, this must be Cover (retained) to support accumulation of the payer’s retained amount within the treaty context.

Level

Specifies the entity level at which the limit is accumulated. For example, Insurable entity or Function (for event-based accumulation). The allowed values depend on your reinsurance limit business rules.

Reference

Specifies the time or trigger reference used for limit accumulation. For example, Calendar year, Plan year, or First claim). The allowed values depend on your reinsurance limit business rules.

Reinsurance (indicator)

Indicates whether the limit is a reinsurance-specific limit (Yes or No). When set to Yes, the UI can display this limit consumption separately from regular benefit limit consumption.

Processing Logic (Calculation)

Reinsurance Regime processing is a critical step in claims adjudication, that occurs after the regular benefit regimes. It involves applying reinsurance rules based on parameters received from the enrollment response. The system calculates the amount of the claim to be covered by the reinsurer and adjusts the retention (the insurer’s share) accordingly.

  1. Apply Regular Coverage Regimes: The regular coverage regimes are applied first to determine the initial covered amount for the claim. This represents what the insurance company pays and forms the basis for reinsurance calculation.

  2. Set Retention Amount: The system sets the retention amount to match the reinsurance input amount of the claim, determined by finding all claim line coverages that are attached to a coverage label of type or action Cover and have the checkbox Counts Towards Reinsurance Input Amount? set to true. This represents the portion of the claim that the insurer retains before applying any reinsurance.

  3. Select Reinsurance Regimes from Enrollment Response: The system retrieves relevant reinsurance treaties from the Policy Reinsurance Regime Treaty table based on the product used during adjudication.

    • It selects all applicable policy reinsurance treaties and identifies the associated reinsurance regime codes.

    • Multiple treaties can be found and are processed according to their sequence number.

  4. Evaluate Reinsurance Regimes: Reinsurance regimes are applied in the order specified by the sequence in the enrollment response.

  5. Condition Evaluation: The system evaluates whether each reinsurance regime should be applied:

    • If no rules are associated with a regime, it is skipped.

    • Each reinsurance regime can have a single attached condition. This condition is evaluated to determine whether the reinsurance regime applies to the current benefit. For example, a reinsurance regime can only apply to inpatient benefits.

      • If the condition is true, go to the next step.

      • If the condition is false, go to step 10.

  6. Retrieve Parameters from Enrollment Response: The parameters for the reinsurance regime (such as the percentage covered by the reinsurer or the retention limit) are retrieved exclusively from the enrollment response. Reinsurance parameters are always sourced from the enrollment response under the <productTreatyParameters> section.

  7. Process Reinsurance Rules: Processing the regime starts with the first reinsurance rule:

    • Retrieve and apply the parameters that have a matching coverWithholdCategory and treatyCode.

    • At the end of the rule, create Claim Line Reinsurance Rule Coverage for both the covered and withhold portions.

    • Repeat the same process for each rule in the regime.

    • After processing all the rules, create the final Claim Line Reinsurance Coverages.

  8. Calculate Reinsurance Regime: When a reinsurance regime is applied, it creates two entities:

    • Claim Line Reinsurance Rule Coverages: These specify the reinsurance rules applied to the claim line.

    • Claim Line Reinsurance Coverages: These represent the actual amounts covered by the reinsurer.

  9. Check for Additional Reinsurance Regimes: The system checks if there are any remaining reinsurance regimes to process.

    • If there are more regimes, it returns to step 4.

    • If all regimes are processed, the calculation concludes.

  10. After applying a reinsurance regime, the system updates the Claim Line Retention Amount by summing up all the covered amounts from the claim line reinsurance coverages plus the covered amounts from the claim line coverages that are not counted towards reinsurance. This indicates the amount that the insurer retains after accounting for contributions from reinsurance.

  • When the user selects Apply To as Retention Amount in the reinsurance rules, it indicates that any existing retained reinsurance coverage labels of type cover are superseded.

  • The reinsurance input amount of the claim is determined by finding all claim line coverages that are attached to a coverage label of type or action Cover that has a checkbox Counts Towards Reinsurance Input Amount? set to true.

Error Messages

Table 5. Error Message
Code Severity Message

CLA-RIRU-001

Informative

Reinsurance regime(s) '{0}', '{1}', and '{2}' in enrollment response have no mapping in the system.

To clarify:

  • {0} = first regime name

  • {1} = Second regime name (include with a comma(,) and '{1}'if applicable, else leave empty.

  • {2} = Third regime name (include with a comma(,) and '{2}'if applicable, else leave empty.

  • Continue this pattern for additional regimes.

Linking with Enrollment Data

Enrollment Response Example (JSON)

Reinsurance regimes rely on parameters from the enrollment response to apply rules. Below is an example of how treaty information appears in the enrollment JSON payload.

{
    "productTreaties": [
        {
            "sequence": 1,
            "treatyCode": "TREATY1",
            "treatyDescription": "REINSURER1",
            "reinsuranceRegimeCode": "R90C10",

            "productTreatyParameters": [
                {
                    "type": "percentage",
                    "percentageValue": 10,
                    "coverWithholdCategoryCode": "QUOTASHARE"
                }
            ]
     }
   ]
}

Sample Use Cases

This section explains use cases, which cover common customer scenarios. Each section includes configuration details, policy information, enrollment responses, and processing results.

Configuration

The following configuration applies to all cases:

Coverage Labels

Use the following table to set up the coverage labels:

Table 6. Coverage Labels
Code DisplayName Action Seq System Spec Counts Towards Reinsurance Input Amount

COVER

COVER

COVER

Yes

DEDUCTIBLE

DEDUCTIBLE

WITHHOLD

COINSURANCE

COINSURANCE

WITHHOLD

RETAIN

RETAIN

COVER

REINSURE

REINSURE

WITHHOLD

ORIGINAL

ORIGINAL

Original

Yes

REINSURANCE_INPUT_AMOUNT

REINSURANCE_INPUT_AMOUNT

Original

Yes

RETENTION_AMOUNT

RETENTION_AMOUNT

Original

Yes
Cover Withhold Category

Use the following table to set up the category for risk splitting:

Table 7. Cover Withhold Category
Code Description Cover Label Withhold Label

RETAIN_REINSURE

RetainedAndReinsured

RETAIN

REINSURE
Reinsurance Regime

Configure the regime as shown in the following table:

Table 8. Reinsurance Regime
Code Description Dylo condition Active

REINSURE_REG

Retain X% Cede Y%

Yes
Reinsurance Regime Rules

Configure the rules using the following table to define how the system applies the 90/10 split.

Table 9. Reinsurance Regime Rules
Sequence Action Percentage Of coverage label Subject (Retention Amount/Label) Applies to label Category Retain label Reinsure label Message

1

Reinsure

As per deal

REINSURANCE_INPUT_AMOUNT

Retention Amount

RETAIN_REINSURE

RETAIN

REINSURE

Use Case 1: Quota Share Treaty

This section shows how a primary insurer and a reinsurer share risk under a quota share treaty, with the insurer holding a 90% share and the reinsurer a 10% share.

Policy Information

Policy Reinsurance Regime Treaty

The following table describes the policy reinsurance regime treaty:

Table 10. Policy Reinsurance Regime Treaty
Field Value

Treaty Code

QUOTASHARE

Treaty Description

REINSURER1

Reinsurance Regime Code

R90C10
Policy Reinsurance Regime Treaty Param

The following table describes the policy reinsurance regime treaty parameter:

Table 11. Policy Reinsurance Regime Treaty Parameters
Field Value

Type

Percentage

Percentage Value

10

Cover Withhold Category

RETAIN_REINSURE

Enrollment Response (JSON)

Enrollment response includes the following information for the quota share treaty:

{
  "productTreaties": [
    {
      "sequence": 1,
      "treatyCode": "QUOTASHARE",
      "treatyDescription": "REINSURER1",
      "reinsuranceRegimeCode": "R90C10",
      "productTreatyParameters": [
        {
          "type": "percentage",
          "percentageValue": 10,
          "coverWithholdCategoryCode": "RETAIN_REINSURE"
        }
      ]
    }
  ]
}

Processing Results

For a $10,000 claim, the system splits the amount based on the treaty ratio, and its processing results are as shown below:

Table 12. Claim Processing Results for $10,000 Claim
Claim Claim line Benefits (Claims line coverages) Reinsurance results

Claim

Seq

Claimed

Allowed

Covered

Action

Coverage label

Amount

Reins regime

Action

Label

Amount

CLA123

1

$10000

$10000

$8100

Cover

COVER

$8100

R90C10

Retain

RETAIN

$7290

Withhold

DEDUCTIBLE

$1000

R90C10

Reinsure

REINSURE

$810

Withhold

COINSURANCE

$900

Use Case 2: Surplus Treaty

In a surplus treaty, the primary insurer retains a specific portion of the risk known as the retention amount, while the reinsurer takes on any risk exceeding that amount. The premiums and claims are divided based on the risk-sharing ratio.

Example Scenarios 1: No Reinsurance Triggered

Policy Details

The following are the policy details when reinsurance does not apply:

Table 13. Policy Details When No Reinsurance Triggered
Parameter Value

Policy Code (policy.code)

POL1234

Policy Sum Insured

$80,000

Treaty Retention Amount (reinsuranceTreaty.retentionAmount)

$100,000

Premium

$5,000
Risk & Premium Split

The following table describes the risk and premium split when reinsurance does not apply:

Table 14. Risk & Premium Split When No Reinsurance Triggered
Component Value

Retained Risk

$80,000

Ceded Risk

$0

Retained Premium

$5,000

Ceded Premium

$0
Since the sum insured is less than the retention amount, the primary insurer retains all the risk and premium.

Example Scenario 2: Reinsurance Triggered

This scenario applies to two policies, POL1235 and POL1236, in which the sum insured exceeds the retention.

Example Policy 1: POL1235

Policy Details

The following are policy details for POL1235:

Table 15. Policy Details of POL1235 When Reinsurance Triggered
Parameter Value

Policy Code (policy.code)

POL1235

Policy Sum Insured

$200,000

Treaty Retention Amount (reinsuranceTreaty.retentionAmount)

$100,000

Premium

$10,000
Risk & Premium Split

Since the sum insured exceeds retention, the system splits risk and premium. The following table describes the details:

Table 16. Risk & Premium Split of POL1235
Component Value

Retained Risk

$100,000

Ceded Risk

$100,000

Retained %

50%

Ceded %

50%

Retained Premium

$5,000

Ceded Premium

$5,000

Enrollment Response (JSON)

This is the response returned when a product is enrolled in the quota share treaty:

{
  "productTreaties": [
    {
      "sequence": 1,
      "treatyCode": "SURPLUS",
      "treatyDescription": "REINSURER",
      "reinsuranceRegimeCode": "REINSURE_REG",
      "productTreatyParameters": [
        {
          "type": "percentage",
          "percentageValue": 50,
          "coverWithholdCategoryCode": "RETAIN_REINSURE"
        }
      ]
    }
  ]
}
The percentage varies by policy, based on retention and sum insured.

Processing Results

Claim 1: $10,000

For a $10,000 claim, the system splits the amount based on the treaty ratio processing. See the following table for results:

Table 17. Claim 1: $10,000 Processing Results
Claim Claim line Benefits (Claims line coverages) Reinsurance results

Claim

Seq

Claimed

Allowed

Covered

Action

Coverage label

Amount

Reins regime

Action

Label

Amount

CLA123

1

$10000

$10000

$8100

Cover

COVER

$8100

RGENERIC

Retain

RETAIN

$4050

Withhold

DEDUCTIBLE

$1000

RGENERIC

Reinsure

REINSURE

$4050

Withhold

COINSURANCE

$900

Example Policy 2: POL1236

Policy Details

The following are the details of the policy for POL1236:

Table 18. Policy Details (POL1236)
Parameter Value

Policy Code (policy.code)

POL1236

Policy Sum Insured

$300,000

Treaty Retention Amount (reinsuranceTreaty.retentionAmount)

$120,000

Premium

$12,000
Risk & Premium Split

Since the sum insured exceeds retention, the system splits risk and premium. See the following table for details:

Table 19. Risk & Premium Split (POL1236)
Component Value

Retained Risk

$120,000

Ceded Risk

$180,000

Retained %

40%

Ceded %

60%

Retained Premium

$4,800

Ceded Premium

$7,200

Policy Information

Policy Reinsurance Regime Treaty

The following table describes the policy information of the reinsurance regime treaty:

Table 20. Policy Reinsurance Regime Treaty (POL1236)
Field Value

Treaty Code

SURPLUS

Treaty Description

REINSURER

Reinsurance Regime Code

RGENERIC
Policy Reinsurance Regime Treaty Param

The following table describes the policy information of the reinsurance regime treaty param:

Table 21. Policy Reinsurance Regime Treaty Param
Field Value

Type

Percentage

Percentage Value

60

Cover Withhold Category

RETAIN_REINSURE

Enrollment Response (JSON)

This is the response returned when a product is enrolled under the surplus treaty:

{
  "productTreaties": [
    {
      "sequence": 1,
      "treatyCode": "SURPLUS2",
      "treatyDescription": "REINSURER   ",
      "reinsuranceRegimeCode": "RGENERIC",
      "productTreatyParameters": [
        {
          "type": "percentage",
          "percentageValue": 60,
          "coverWithholdCategoryCode": "RETAIN_REINSURE"
        }
      ]
    }
  ]
}

Processing Results

Each claim is split according to the treaty ratio and persisted in the new entities as shown below:

Claim 1: $10,000

For a $10,000 claim, the system splits the amount based on the treaty ratio. See the following table for results:

Table 22. Claim Processing Results for $10,000 Claim (POL1236)
Claim Claim line Benefits (Claims line coverages) Reinsurance results

Claim

Seq

Claimed

Allowed

Covered

Action

Coverage label

Amount

Reins regime

Action

Label

Amount

CLA123

1

$10000

$10000

$8100

Cover

COVER

$8100

RGENERIC

Retain

RETAIN

$3240

Withhold

DEDUCTIBLE

$1000

RGENERIC

Reinsure

REINSURE

$4860

Withhold

COINSURANCE

$900

Use Case 3: Quota Surplus Treaty

Overview

Two types of treaties are applied based on the insured sum relative to the retention amount:

Table 23. Treaty Application Conditions
Condition Treaty Type

Sum Insured ≤ Retention Amount

Quota Share Treaty

Sum Insured > Retention Amount

Surplus Treaty

Quota Share Treaty

  • Applies: When the sum insured is equal to or less than the retention amount.

  • Split: Fixed percentage between the primary insurer and the reinsurer.

    Example

  • Policy Sum Insured = $80,000

  • Treaty Retention Amount = $100,000

  • Policy Premium: $5,000

  • Treaty Quota Share Ratio: 60% Reinsurer / 40% Primary Insurer

Table 24. Quota Share Split
Party Share of Sum Insured Share of Premium

Primary Insurer (40%)

$32,000

$2,000

Reinsurer (60%)

$48,000

$3,000

Surplus Treaty

  • Applies: When the sum insured exceeds the retention amount.

  • Split: The primary insurer retains up to the retention limit, while the excess is transferred to the reinsurer.

    Example

  • Policy Sum Insured = $400,000

  • Treaty Retention Amount = $100,000

  • Policy Premium: $20,000

Table 25. Surplus Treaty Split
Party Share of Sum Insured Share of Premium

Primary Insurer

$100,000

$5,000

Reinsurer

$300,000

$15,000

Why Retention Matters

Retention serves as a decision point:

  • If the policy fits within retention, apply quota share.

  • If it exceeds retention, switch to surplus logic.

Example Scenario 1

  • Sum Insured: $80,000

  • Treaty Retention Amount (reinsuranceTreaty.retentionAmount): $100,000

  • Policy Premium: $5,000

  • Quota Share Ratio: 60% for the Primary Insurer and 40% for the Reinsurer.

Since the sum insured ($80,000) is less than the retention amount ($100,000), the Quota Share Treaty applies fully. Otherwise, the Surplus Treaty applies fully.

Risk Ratio

In a Quota Share agreement, both the premium and the risk are split according to the agreed ratio (60% for the primary insurer and 40% for the reinsurer). This means that, even if the total sum insured is less than the retention amount, the risk will still be allocated in these percentages:

  • Primary Insurer’s Share of Risk (60%): 60% × 80,000 = 48,000

  • Reinsurer’s Share of Risk (40%): 40% × 80,000 = 32,000

Premium Split

The total premium of $5,000 is split between primary insurer and the reinsurer according to the quota share ratio:

  • Primary Insurer’s Share of Premium (60%): 60% × 5,000 = 3,000

  • Reinsurer’s Share of Premium (40%): 40% × 5,000 = 2,000

Configuration

Table 26. Coverage Labels
Code DisplayName Action Seq System Spec Counts Towards Reinsurance Input Amount

COVER

COVER

COVER

Yes

DEDUCTIBLE

DEDUCTIBLE

WITHHOLD

COINSURANCE

COINSURANCE

WITHHOLD

RETAIN

RETAIN

COVER

REINSURE

REINSURE

WITHHOLD

ORIGINAL

ORIGINAL

Original

Yes

REINSURANCE_INPUT_AMOUNT

REINSURANCE_INPUT_AMOUNT

Original

Yes

RETENTION_AMOUNT

RETENTION_AMOUNT

Original

Yes
Cover Withhold Category

The following table describes the configuration parameters of the cover withhold category:

Table 27. Cover Withhold Category
Code Description Cover Label Withhold Label

RETAIN_REINSURE

RetainedAndReinsured

RETAIN

REINSURE
Reinsurance Regime

The following table describes the configuration parameters of the reinsurance regime:

Table 28. Reinsurance Regime
Code Description Dylo condition Active?

R60C40

Retain 60% Cede 40%

 — 

Yes
Reinsurance Regime Rules

The following table describes the configuration parameters of the reinsurance regime rules:

Table 29. Reinsurance Regime Rules
Sequence Action Percentage Of Applied To Apply To Label Category Retain Reinsure Message

1

Withhold

40%

REINSURANCEINPUTAMOUNT

RETENTIONAMOUNT

NULL

RETAIN_REINSURE

RETAIN

REINSURANCE

Policy Information

Policy Reinsurance Regime Treaty

The following table describes the policy information of reinsurance regime treaty:

Table 30. Policy Reinsurance Regime Treaty
Field Value

Treaty Code

QUOTASHARE

Treaty Description

REINSURER1

Reinsurance Regime Code

R60C40
Policy Reinsurance Regime Treaty Param

The following table describes the policy information of the reinsurance regime treaty param:

Table 31. Policy Reinsurance Regime Treaty Parameters
Field Value

Type

Percentage

Percentage Value

40

Cover Withhold Category

RETAIN_REINSURE

Enrollment Response (JSON)

This is the response returned when a product is enrolled under the quota share treaty:

{
  "productTreaties": [
    {
      "sequence": 1,
      "treatyCode": "QUOTASHARE",
      "treatyDescription": "REINSURER1",
      "reinsuranceRegimeCode": "R60C40",
      "productTreatyParameters": [
        {
          "type": "percentage",
          "percentageValue": 40,
          "coverWithholdCategoryCode": "RETAIN_REINSURE"
        }
      ]
    }
  ]
}

Processing Results

Claim 1: $10,000

For a $10,000 claim, the system splits the amount based on the treaty ratio and the processing results are as shown below:

Table 32. Claim Processing Results for $10,000 Claim (Quota Share)
Claim Claim line Benefits (Claims line coverages) Reinsurance results

Claim

Seq

Claimed

Allowed

Covered

Action

Coverage label

Amount

Reins regime

Action

Label

Amount

CLA123

1

$10000

$10000

$8100

Cover

COVER

$8100

R60C40

Retain

RETAIN

$4860

Withhold

DEDUCTIBLE

$1000

R60C40

Reinsure

REINSURE

$3240

Withhold

COINSURANCE

$900

Example Scenario 2

Policy Details

The following are policy details when the surplus treaty applies:

Table 33. Policy Details (Surplus Treaty)
Parameter Value

Policy Code (policy.code)

POL1235

Policy Sum Insured

$200,000

Treaty Retention Amount (reinsuranceTreaty.retentionAmount)

$100,000

Premium

$10,000

Since the sum insured ($200,000) is more than the retention amount ($100,000), the surplus treaty applies.

Risk & Premium Split

The breakdown of the risk and premium is described below:

Table 34. Risk & Premium Split (Surplus Treaty)
Component Value

Retained Risk

$100,000

Ceded Risk

$100,000

Retained %

50%

Ceded %

50%

Retained Premium

$5,000

Ceded Premium

$5,000

Policy Information

Policy Reinsurance Regime Treaty

The following table describes the policy information of reinsurance regime treaty:

Table 35. Policy Reinsurance Regime Treaty
Field Value

Treaty Code

SURPLUS

Treaty Description

REINSURER

Reinsurance Regime Code

RGENERIC
Policy Reinsurance Regime Treaty Param

The following table describes the policy information of reinsurance regime treaty param:

Table 36. Policy Reinsurance Regime Treaty Param
Field Value

Type

Percentage

Percentage Value

50

Cover Withhold Category

RETAIN_REINSURE

Enrollment Response (JSON)

Enrollment response includes the following information for surplus treaty:

{
  "productTreaties": [
    {
      "sequence": 1,
      "treatyCode": "SURPLUS",
      "treatyDescription": "REINSURER1",
      "reinsuranceRegimeCode": "RGENERIC",
      "productTreatyParameters": [
        {
          "type": "percentage",
          "percentageValue": 50,
          "coverWithholdCategoryCode": "RETAIN_REINSURE"
        }
      ]
    }
  ]
}

Processing Results

Claim 1: $10,000

For a $10,000 claim, the system splits the amount based on the treaty ratio, and its processing results are as shown below:

Table 37. Claim Processing Results for $10,000 Claim (Surplus Treaty)
Claim Claim line Benefits (Claims line coverages) Reinsurance results

Claim

Seq

Claimed

Allowed

Covered

Action

Coverage label

Amount

Reins regime

Action

Label

Amount

CLA123

1

$10000

$10000

$8100

Cover

COVER

$8100

RGENERIC

Retain

RETAIN

$4050

Withhold

DEDUCTIBLE

$1000

RGENERIC

Reinsure

REINSURE

$4050

Withhold

COINSURANCE

$900

Use Case 4: Retention Limit Reinsurance Regime

This use case covers retention limit reinsurance, applied after coverage regimes. In this arrangement, the insurer retains a fixed amount across multiple claims, subject to a retention limit.

This limit may apply to claims made by the same individual under the same policy or related to the same event, typically within a specified timeframe, such as a calendar year or contract year. The reinsurer covers any amount exceeding this retention limit.

Example

For Example:

  • Retention limit is $5,000

  • Applies per person that is, member identifier per calendar year.

If John Doe has a policy and submits three claims in one year:

Table 38. Retention Limit Example
Claim Member Policy Amount Retention Limit Counter Payer Retains Reinsurer Pays

$0

CLA123

John Doe

POL123

$10,000

$5,000 (Maximum reached)

$5,000

$5,000

CLA124

John Doe

POL123

$20,000

$5,000

$0

$20,000

The insurer retains up to $5,000 for John’s policy that year. After that, the reinsurer covers the excess.

Policy Information

Policy Reinsurance Regime Treaty

The following table describes the policy information of the reinsurance regime treaty:

Table 39. Policy Reinsurance Regime Treaty
Field Value

Treaty Code

RETENTIONLIMIT

Treaty Description

REINSURER

Reinsurance Regime Code

REINSURE_REG
Policy Reinsurance Regime Treaty Param

The following table describes the policy information of the reinsurance regime treaty param:

Table 40. Policy Reinsurance Regime Treaty Param
Field Value

Type

Percentage

Amount

5000

Cover Withhold Category

RETAIN_REINSURE

Enrollment Response (JSON)

Enrollment response includes the following information:

{
    "productTreaties": [
        {
            "sequence": 1,
            "treatyCode": "RETENTIONLIMIT",
            "treatyDescription": "REINSURER",
            "reinsuranceRegimeCode": "REINSURE_REG",
            "productTreatyParameters": [
                {
                    "type": "limit",
                    "amount": {
                        "value": 5000,
                        "currency": "USD"
                    },
                    "coverWithholdCategoryCode": "RETAIN_REINSURE",
                    "limitCode": "REINSURE_RET_LIM"
                }
            ]
        }
    ]
}

Processing Results

For claims under this regime, the system applies the retention limit. See the following table for results:

Table 41. Claim Processing Results for Retention Limit
Claim Claim line Benefits (Claims line coverages) Reinsurance results

Claim

Seq

Claimed

Allowed

Covered

Action

Coverage label

Amount

Reins regime

Action

Label

Amount

CLA123

1

$14000

$12000

$10000

Cover

COVER

$10000

REINSURE_REG

Retain

RETAIN

$5000

Withhold

DEDUCTIBLE

$1000

REINSURE_REG

Reinsure

REINSURE

$5000

Withhold

COINSURANCE

$1000

CLA124

1

$28000

$24000

$20000

Cover

COVER

$20000

REINSURE_REG

Retain

RETAIN

$0

Withhold

DEDUCTIBLE

$2000

REINSURE_REG

Reinsure

REINSURE

$20000

Withhold

COINSURANCE

$2000

Use Case 5: Excess of Loss Reinsurance Regime

This use case covers excess-of-loss reinsurance applied across multiple claims in the context of a large-scale event, such as an earthquake. The reinsurer usually covers the losses that exceed a specified cumulative retention limit. This means that after the total amount of claims for the event exceeds the retention limit, the reinsurer covers all subsequent losses.

Claim Member Policy Catastrophic Event Amount Retention Limit Counter Payer Retains Reinsurer Pays

$0

CLA123

John Doe

POL123

EVNT123

$20,000

$20,000

$20,000

$0

CLA124

William

POL124

EVNT123

$15,000

$35,000

$15,000

$0

CLA125

George

POL125

EVNT123

$30,000

$50,000 (Maximum reached)

$15,000

$15,000

CLA126

Eleanor

POL126

$40,000

Configuration

Table 42. Limits
Code Description Display Name Action Level Reference Reinsurance Indicator?

EXC_LOSS_LIM

Excess Loss Limit

EXC_LOSS_LIM

Cover

Function (claim.event is catastrophicEvent)

Calendar Year

YES
Code Description Dylo Condition Active?

EXCESS_LOSS_REGIME

Excess Loss Regime

DYLO_EL (claimLine.catastrophicEvent is not NULL)

Y

Policy Information

Policy Reinsurance Regime Treaty

The following table describes the policy information of reinsurance regime treaty:

Table 43. Policy Reinsurance Regime Treaty
Field Value

Treaty Code

EXCESSLOSS

Treaty Description

REINSURER5

Reinsurance Regime Code

EXCESS_LOSS_REGIME
Policy Reinsurance Regime Treaty Param

The following table describes the policy information of reinsurance regime treaty param:

Table 44. Policy Reinsurance Regime Treaty Parameters
Field Value

Type

Percentage

Amount

50000

Cover Withhold Category

RETAIN_REINSURE

Limit Code

EXC_LOSS_LIM

Enrollment Response (JSON)

This is the response returned when a product is enrolled under the Excess of Loss Treaty:

{
  "productTreaties": [
    {
      "sequence": 1,
      "treatyCode": "EXCESSLOSS",
      "treatyDescription": "REINSURER5",
      "reinsuranceRegimeCode": "EXCESS_LOSS_REGIME",
      "productTreatyParameters": [
        {
          "type": "limit",
          "amount": {
            "value": 50000,
            "currency": "USD"
          },
          "coverWithholdCategoryCode": "RETAIN_REINSURE",
          "limitcode": "EL_LIMIT"
        }
      ]
    }
  ]
}

Processing Results

Each claim is evaluated cumulatively against the retention limit. Once the $50,000 retention is exhausted, the reinsurer covers the remaining losses.

Table 45. Claim Processing Results for Excess of Loss
Claim Claim Line Benefits (Claims line coverages) Reinsurance results

Claim

Seq

Claimed

Allowed

Covered

Action

Coverage label

Amount

Reins regime

Action

Label

Amount

CLA123

1

$25,000

$22,000

$20,000

Cover

COVER

$20,000

EXCESS_LOSS_REGIME

Retain

RETAIN

$20,000

Withhold

DEDUCTIBLE

$1000

Reinsure

REINSURE

$0

Withhold

COINSURANCE

$1000

CLA125

1

$20,000

$16500

$15000

Cover

COVER

$15,000

EXCESS_LOSS_REGIME

Retain

RETAIN

$15,000

Withhold

DEDUCTIBLE

$750

Reinsure

REINSURE

$0

Withhold

COINSURANCE

$750

CLA126

1

$35,000

$33,000

$30,000

Cover

COVER

$30,000

EXCESS_LOSS_REGIME

Retain

RETAIN

$15,000

Withhold

DEDUCTIBLE

$1500

Reinsure

REINSURE

$15,000

Withhold

COINSURANCE

$1500

Use Case 6: Multiple treaties, Both with Quota Share arrangements (Treaties Applied Consecutively)

This use case shows how the primary insurer enters into multiple quota share treaties applied in sequence. Each treaty applies to the insurer’s retained amount from the previous treaty, allowing risk to be split progressively across multiple reinsurers.

Treaty 1

Policy Information

Policy Reinsurance Regime Treaty

The following table describes the configuration parameters of the policy reinsurance regime treaty:

Table 46. Policy Reinsurance Regime Treaty
Treaty Code Treaty Description Reinsurance Regime Code

QUOTASHARE1

REINSURER1

QUOTASHARE_REGIME

QUOTASHARE2

REINSURER2

QUOTASHARE_REGIME
Policy Reinsurance Regime Treaty Param

The following table describes the configuration parameters of the policy reinsurance regime treaty param:

Table 47. Policy Reinsurance Regime Treaty Param
Type Percentage Value Cover Withhold Category

Percentage

10

RETAIN_REINSURE

Percentage

20

RETAIN_REINSURE

Enrollment Response (JSON)

Enrollment response includes the following information under both quota share treaties that are applied consecutively:

{
  "productTreaties": [
    {
      "sequence": 1,
      "treatyCode": "QUOTASHARE1",
      "treatyDescription": "REINSURER1",
      "reinsuranceRegimeCode": "QUOTASHARE_REGIME",
      "productTreatyParameters": [
        {
          "type": "percentage",
          "percentageValue": 10,
          "coverWithholdCategoryCode": "RETAIN_REINSURE"
        }
      ]
    },
    {
      "sequence": 2,
      "treatyCode": "QUOTASHARE2",
      "treatyDescription": "REINSURER2",
      "reinsuranceRegimeCode": "QUOTASHARE_REGIME",
      "productTreatyParameters": [
        {
          "type": "percentage",
          "percentageValue": 20,
          "coverWithholdCategoryCode": "RETAIN_REINSURE"
        }
      ]
    }
  ]
}

Treaty 2

Policy Information

Policy Reinsurance Regime Treaty

The following table describes the policy information of the reinsurance regime treaty:

Table 48. Policy Reinsurance Regime Treaty
Field Value

Treaty Code

QUOTASHARE2

Treaty Description

REINSURER2

Reinsurance Regime Code

QUOTASHARE_REGIME
Policy Reinsurance Regime Treaty Param

The following table describes the policy information of the reinsurance regime treaty param:

Table 49. Policy Reinsurance Regime Treaty Param
Field Value

Type

Percentage

Percentage Value

20

Cover Withhold Category

RETAIN_REINSURE2

Enrollment Response (JSON)

Enrollment response includes the following information under both quota share treaties that are applied consecutively:

{
  "productTreaties": [
    {
      "sequence": 1,
      "treatyCode": "QUOTASHARE1",
      "treatyDescription": "REINSURER1",
      "reinsuranceRegimeCode": "QUOTASHARE_REGIME1",
      "productTreatyParameters": [
        {
          "type": "percentage",
          "percentageValue": 10,
          "coverWithholdCategoryCode": "RETAIN_REINSURE1"
        }
      ]
    },
    {
      "sequence": 2,
      "treatyCode": "QUOTASHARE2",
      "treatyDescription": "REINSURER2",
      "reinsuranceRegimeCode": "QUOTASHARE_REGIME2",
      "productTreatyParameters": [
        {
          "type": "percentage",
          "percentageValue": 20,
          "coverWithholdCategoryCode": "RETAIN_REINSURE2"
        }
      ]
    }
  ]
}

Processing Results

Claim 1: $10,000

For a $10,000 claim, the system splits the amount based on the treaty ratio and its processing results are as shown below:

Table 50. Claim Processing Results for $10,000 Claim (Consecutive Treaties)
Claim Claim line Benefits (Claims line coverages) Reinsurance results

Claim

Seq

Claimed

Allowed

Covered

Action

Coverage label

Amount

Treaty Code

Reins regime

Action

Label

Amount

CLA123

1

$10000

$10000

$8100

Cover

COVER

$8100

QUOTASHARE1

R90C10

Reinsure

REINSURE1

$810

Withhold

DEDUCTIBLE

$1000

R90C10

Retain

RETIAN1

$7290

Withhold

COINSURANCE

$900

QUOTASHARE2

R80C20

Reinsure

REINSURE2

$1458

R80C20

Retain

RETAIN2

$5832

Use Case 7: Quota Share Treaty With Three Reinsurers

This use case shows how the primary insurer establishes a quota share treaty with three reinsurers: REINSURER_MUNICH, REINSURER_SWISS, and REINSURER_BERLIN.

Under this agreement, the retention ratio is set at 80% for the Primary Insurer and 20% for the reinsurers. This means that the reinsurers collectively assume 20% of both the premiums and claims, which are distributed among them according to predefined proportions.

Policy Information

Policy Reinsurance Regime Treaty

The following table describes the configuration parameters of the reinsurance regime treaty:

Table 51. Policy Reinsurance Regime Treaty
Treaty Code Treaty Description Reinsurance Regime Code

QUOTASHARE

Quota Share with Three Reinsurers

REINSURER_MSB
Policy Reinsurance Regime Treaty Param

The following table describes the configuration parameters of the reinsurance regime treaty param:

Table 52. Policy Reinsurance Regime Treaty Parameters
Type Percentage Value Cover Withhold Category

Percentage

80

RETAIN_REINSURE

Percentage

50

REINSURER_MUNICH

Percentage

20

REINSURER_SWISS

Percentage

30

REINSURER_BERLIN

Enrollment Response (JSON)

Enrollment response includes the following information under the quota share treaty with three reinsurers:

{
  "productTreaties": [
    {
      "sequence": 1,
      "treatyCode": "QUOTASHARE",
      "treatyDescription": "Quota Share with Three Reinsurers",
      "reinsuranceRegimeCode": "REINSURER_MSB",
      "productTreatyParameters": [
        {
          "type": "percentage",
          "percentageValue": 80,
          "coverWithholdCategoryCode": "RETAIN_REINSURE"
        },
        {
          "type": "percentage",
          "percentageValue": 50,
          "coverWithholdCategoryCode": "REINSURER_MUNICH"
        },
        {
          "type": "percentage",
          "percentageValue": 20,
          "coverWithholdCategoryCode": "REINSURER_SWISS"
        },
        {
          "type": "percentage",
          "percentageValue": 30,
          "coverWithholdCategoryCode": "REINSURER_BERLIN"
        }
      ]
    }
  ]
}

Processing Results

Claim 1: $10,000

For a $10,000 claim, the system splits the amount based on the treaty ratio, and distributed among the reinsurers based on their respective shares:

Table 53. Detailed Claim Processing Results for $10,000 Claim
Claim Line Benefits (Claims line coverages) Reinsurance results

Claim

Seq

Claimed

Allowed

Covered

Action

Coverage label

Amount

Treaty Code

Reins regime

Action

Label

Amount

CLA123

1

$10000

$10000

$8100

Cover

COVER

$8100

QUOTASHARE

REINSURER_MSB

Retain

RETAINED1

$6480

Withhold

DEDUCTIBLE

$1000

REINSURER_MSB

Reinsure

CEDED1

$1620

Withhold

COINSURANCE

$900

REINSURER_MSB

TEMP

RETAINED2

810

REINSURER_MSB

CEDED_TO_REINSURER_MUNICH

CEDED2

810

REINSURER_MSB

TEMP

RETAINED3

486

REINSURER_MSB

CEDED_TO_REINSURER_SWISS

CEDED3

324

REINSURER_MSB

TEMP

RETAINED4

0

REINSURER_MSB

CEDED_TO_REINSURER_BERLIN

CEDED4

486