Question

Why might an insurer sign reinsurance arrangements or treaties with multiple reinsurers?

a.

To limit the liability of the reinsurer.

b.

To reduce the cost of reinsurance.

c.

To spread the risk.

d.

To avoid having to pay claims.

Posted under IC22 Life Insurance Underwriting

Answer: (c).To spread the risk. Explanation:The reinsurance arrangements or treaties may be signed by an insurer with multiple reinsurers, as this helps in spreading the risk.

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Q. Why might an insurer sign reinsurance arrangements or treaties with multiple reinsurers?
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