Question

What is reinsurance?

a.

The transfer of risk from the reinsurer to the ceding company

b.

The transfer of risk from the ceding company to the reinsurer

c.

The transfer of risk from the insurer to the policyholder

d.

The transfer of risk from the policyholder to the insurer

Posted under IC22 Life Insurance Underwriting

Answer: (b).The transfer of risk from the ceding company to the reinsurer Explanation:Reinsurance is the transfer of risk from the ceding company (direct insurance company) to the reinsurer (another insurance company).

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