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The cedant write an original policy with a limit of US.D two million and five hundrad thousands and receives US.D one million three hundard and twenty in premium .How much of the premium will be retained by the cedant.
maximum treaty capacity = US.D five million
cedant's retention one line ten percent = US.D five hudred thousands
original policy limit written in the cedant's office = US.D two million and five hundred thousands
cedant's retention = five hundred thousands divided by two thousands and five hudred = twenty percent
Hence , premium retained by cedant will be = US.D two hundred sixty four thousands.
Best wishes .
