Question 1

A facultative certificate is said to "inure to the benefit of" the treaty above it. What does that mean in practice?

Accepted Answer

The facultative recovery is deducted before the treaty is asked to respond — Inuring covers apply first. The treaty only ever sees the loss net of the facultative recovery.

Question 2

A catastrophe XoL layer is worded "net of inuring reinsurance". What loss figure does it actually respond to?

Accepted Answer

The loss remaining after every cover that inures to it has already responded — That is exactly what "net of inuring reinsurance" means in a wording — the layer only ever sees what survives the covers beneath it.

Inuring Reinsurance

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