Lowest QS % to be considered "substantially all"
Basically just the title, what is the lowest QS % to be considered "substantially all"?
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Basically just the title, what is the lowest QS % to be considered "substantially all"?
Comments
The text does not give a threshold. I would say, 75%.
I respectfully disagree with all this talk about a minimum QS threshhold.
Neither Freihaut nor SSAP 62R mention a minimum.
Freihaut 2.1, and SSAP 62R paragraphs 13 a. and 19, talk about the "reinsured portion". So long as insurance risk is fully transferred on the reinsured portion, it should not matter how big the reinsured portion is.
Example: QS that cedes 1%. No risk limiting features.
Re assumes 1%.
The text references are confusing on this. A strict interpretation of the text is as you described where if the "reinsured portion" is fully transferred then this passes the substantially all test, even if the quota-share percentage is only 1%.
But I don't think that interpretation is necessarily what was intended. It "feels" like this test is intended to apply when the quota-share percentage is "high" because that's the English definition of "substantially all". And the examiners' report solution to part (b) of the following exam problem explicitly mentions a high percentage as being relevant in the "substantially all" test, so I would indeed go with the previous answer from @Staff - AC