Section 3 in Obligatory Cession for the financial year 2023-24
3. Terms & Conditions :
(a)Notice of information on cession :(i)There would be no limit on sum insured applicable for the cessions made during the period from 1st April ,2023 to 31st March , 2024.(ii)In view of the above , the Indian Re -insurer may require the ceding insurer to give immediate notice of underwriting information of any cession exceeding an amount as specified by the former . The ceding insurer shall inform the Indian Re -insurer at all times whenever the cession exceeds such specified limits.(b)Commission :Percentage of commission on obligatory cession for different classes of business shall be as follows :(i)Minimum 5 % for Motor TP and Oil & Energy insurance .(ii)Minimum 10 % for Group Health insurance .(iii)Minimum 7.50 % for Crop Insurance .(iv)Average Terms for Aviation insurance .(v)Minimum 15 % for all other classes of insurance business .Commission over and above ,can be as mutually agreed between Indian Re -insurer (s) and the ceding insurer .(c)Profit Commission :The Indian Re -insurer shall share the profit commission , on 50 % :50 % basis , with the ceding insurer based on the performance and surplus of the total obligatory portfolio of the ceding insurer , after factoring the following :(i)Incurred loss % (to be worked at the end of 3 financial years).(ii)Management Expenses at 2 % .(iii)Profit at 5 % .(iv)Commission at 15 % .(v)Loss ratio at 50 % to 78 % .No profit commission is payable if the loss ratio exceeds 78 % .Profit commission shall not exceed 14 % .
