An insurer wishes to enter into one of the following reinsurance arrangements: A quota share arrangement with the ceding insurer retaining 65% of any...

An insurer wishes to enter into one of the following reinsurance arrangements:

a. A quota share arrangement with the ceding insurer retaining 65% of any loss

b. A surplus treaty under which the ceding insurer will retain policy amounts up to $110,000.

c. An excess loss arrangement, $100,000 xs $125,000

How much will the reinsurer pay under each of the arrangements for the following losses?

i. $45,000 on a $100,000 policy?

ii. $50,000 on a $200,000 policy

iii. $200,000 on a $220,000 policy