•MNO Insurance has a reinsurance program consisting of a surplus share treaty and a per risk excess of loss treaty. The specifics of these agreements are as follows:
–a five-line surplus share treaty with a $500 000 line
–a $750 000 xs $250 000 per risk excess of loss treaty
–the surplus share treaty applies before the per risk excess of loss treaty (or surplus treaty is placed on gross loss basis)
•Determine how the following losses would be treated by MNO reinsurance program:
–policy A with a $3 000 000 amount of insurance that incurs a $1 000 000 loss
–policy B with a $1 000 000 amount of insurance that incurs a $1 000 000 loss
