Question

Which of the following statements is true about reinsurance?

a.

Reinsurance transfers part of the risk to another insurance company.

b.

Reinsurance is the insurance of insurance.

c.

Reinsurance cannot be done for life insurance.

d.

Both a and b

Posted under IC22 Life Insurance Underwriting

Answer: (d).Both a and b Explanation:Reinsurance is the way in which one direct insurance company transfers part of the risk to another insurance company (the reinsurer). This helps to reduce the liability of the direct insurer to a large extent.

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Q. Which of the following statements is true about reinsurance?
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