Treaty Validation Engine
Every Bordereaux Row. Matched to the
Treaty Clause That Governs It.
CedeOS extracts treaty rules automatically and applies them at ingestion — catching aggregate retention breaches before they become disputes.
The condition
The aggregate breach happened in week 10. Nobody knew until the annual audit.
Your XL treaty aggregate retention is KES 50M. A senior analyst tracks accumulation in a spreadsheet — updated manually after each claims cycle. At week 9, the running total is KES 48M. Two motor claims settle in weeks 10 and 11. The spreadsheet is not updated until the month-end reconciliation.
When the quarterly close runs, cumulative settlements total KES 54M. The XL treaty should have responded for KES 4M. It did not. The dispute takes 8 months. Recovery comes at 40–60 cents on the dollar — if at all. No single person failed. The process had no mechanism to watch accumulation in real time.
The cost
Three failure modes. All caused by the same gap: no system linking the treaty to the data.
Aggregate retention breaches go undetected until settlement
Accumulation tracked in spreadsheets has no real-time signal. The threshold is breached across multiple claims events with no alert. The treaty obligation is missed. The dispute starts when the reinsurer receives the submission — not when the breach occurred.
KES 4M+ average aggregate breach value · Based on analysis of East African XL treaty programs
Reinstatement calculations applied to wrong premium basis
The treaty specifies reinstatement premium on original annual premium. A mid-term endorsement changes the current premium. Your system calculates reinstatement on the post-endorsement figure. The treaty clause on page 47 is clear. It is never checked against each policy's endorsement history.
KES 110K per XL trigger event · Kenyan composite insurer portfolio, CedeOS internal 2024
Treaty clauses applied inconsistently across quarters
Three different actuaries have run the quarterly treaty review over two years. Each applies their own reading of the exclusion schedule. An IFRS 17 audit traces the CSM variance back to inconsistent treaty application. There is no system of record for how each clause was interpreted.
IFRS 17 CSM traceability required · Not optional under external audit from 2023
The standard
What treaty compliance looks like when the treaty is actually linked to the data.
Real time
Aggregate accumulation monitoring
Alert at 80% of retention threshold — before breach, not after settlement
Zero
Treaty clause interpretation gaps
Every clause extracted, indexed, and applied consistently — not interpreted per actuary
Minutes
Treaty document extraction time
vs. 2–3 senior actuary days per quarter for manual review
100%
Bordereaux rows validated against applicable clauses
Not spot-checked against treaty totals — each row, each applicable rule
Pilot outcome
East African composite insurer, Q3 2024: KES 4M+ aggregate retention breach caught before quarterly submission. Accumulation across two motor claims events crossed the XL threshold — flagged at 80% on day 11 of week 10. Treaty responded correctly. Zero dispute.
Advisory
Former Chief Actuary · East African reinsurer · Advisory engagement, 2024
Validated metric
KES 4M+
Average aggregate breach value recovered per event
Based on analysis of East African XL treaty programs. KES 50M aggregate retention threshold — KES 54M cumulative settlement. CedeOS internal analysis, 2024.
The mechanism
Treaty document parsed clause by clause. Every rule indexed against every bordereaux row.
Treaty document parsed clause by clause — retention limits, reinstatement conditions, exclusions, and aggregate caps extracted and indexed against each bordereaux row. Not keyword matching. Clause-type identification, cross-reference resolution, and structured rule extraction — then applied at ingestion.
Extraction methodology
CedeOS identifies clause types in the treaty document (retention, reinstatement, exclusion, aggregate cap), resolves cross-references between clauses, and builds a per-row validation ruleset applied at ingestion. Clauses below extraction confidence threshold are flagged for actuary review — with the relevant treaty text displayed alongside. Developed with chief actuaries across IRA Kenya, NAICOM Nigeria, SAMA Saudi Arabia, and DIFC UAE markets.
Retention limits
Per-risk and aggregate retention thresholds extracted from the treaty schedule. Applied row-by-row as claims accumulate. The XL threshold is a live counter — not a quarterly reconciliation.
KES 50M aggregate retention · KES 5M per-risk retention · tracked continuously
Reinstatement conditions
Reinstatement premium basis (original vs current), number of reinstatements permitted, and pro-rata conditions extracted from the reinstatement clause. Each XL trigger recalculates against the policy's endorsement history automatically.
Original annual premium basis · Pro-rata for period · 1 full reinstatement permitted
Exclusions
Named peril exclusions, class of business exclusions, and geographic exclusions indexed against bordereaux classification fields. Rows matching exclusion criteria flagged before they enter the submission.
War exclusion · Cyber exclusion · Flood sublimit — applied per row, not aggregate total
Aggregate caps
Event aggregate limits and occurrence limits extracted and monitored as each claims batch processes. When accumulation crosses 80% of the cap, a threshold alert is generated — with treaty clause reference and current accumulation figure.
80% threshold alert · clause citation · financial impact at current accumulation rate
How it works
From treaty document to row-level validation in three steps.
Upload treaty document
Upload the treaty PDF or Word document. CedeOS parses it clause by clause — retention limits, reinstatement conditions, exclusions, and aggregate caps are extracted, cross-referenced, and indexed. Minutes, not days.
Apply at ingestion
Every bordereaux row validated against its applicable treaty clauses on ingestion. Cession rates checked against retention limits. Reinstatement premium recalculated from original annual premium. Aggregate accumulation updated in real time.
Alert before breach
Aggregate accumulation reaches 80% of retention threshold — alert generated with current figure, clause reference, and projected breach date at current claims rate. The dispute never starts because the threshold is never silently crossed.
Regulatory frameworks
Treaty accuracy is a regulatory requirement in every market we serve.
IRA Kenya
XL aggregate retention monitoring required under IRA treaty reporting guidelines. Quarterly treaty compliance submissions. CedeOS aggregate threshold alerts prevent undetected breaches before submission reaches the regulator.
NAICOM Nigeria
Minimum retention requirements applied at row level — 40% minimum cession rate validated against treaty terms per bordereaux row. Systematic misapplication of retention clauses eliminated before submission.
SAMA Saudi Arabia
XL treaty structure requirements for licensed Takaful and conventional entities. Reinstatement clause application for Takaful structures handled natively. In-country data processing enforced by architecture.
IFRS 17
Reinsurance contract measurement under IFRS 17 requires accurate treaty application for CSM and Loss Component calculations. Every clause application logged — full audit trail from treaty clause to CSM figure. Not post-hoc calculation.
The path
From treaty document to validated submission in four weeks.
Download the Technical Brief
Treaty extraction architecture, clause-type taxonomy, aggregate monitoring methodology, data residency approach, and regulatory coverage. Everything your chief actuary needs to evaluate the engine. No commitment.
Pilot Assessment
Submit one treaty document and one quarter of bordereaux data. We return an extraction report showing every clause identified, the validation rules applied per row, and any aggregate threshold breaches detected — with treaty clause citation for each.
Live Demo
A 20-minute session using your actual treaty and bordereaux data. We show you the clauses extracted, the rows flagged, and the aggregate accumulation curve — with citation and financial impact for each deviation.
First Validated Submission
Pilot go-live. First quarterly close with CedeOS treaty validation active. Aggregate threshold monitored in real time. Every reinstatement calculated from original premium basis. Full IFRS 17 audit trail.
Your next aggregate threshold breach should be caught before it becomes a dispute.
Start with the Technical Brief. Request a pilot assessment when ready. Book a live demo to see your own treaty extracted and applied.
Your next quarterly close should take 3 hours. Start your pilot assessment