Question

What is the role of a reinsurer in a reinsurance transaction?

a.

To assume the risk transferred by the ceding company

b.

To sell insurance policies to policyholders

c.

To provide commission to the ceding company

d.

To transfer the risk to another insurance company

Posted under IC22 Life Insurance Underwriting

Answer: (a).To assume the risk transferred by the ceding company Explanation:The reinsurer assumes the risk transferred by the ceding company, thereby reducing the liability of the direct insurer.

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Q. What is the role of a reinsurer in a reinsurance transaction?
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