Question

What is the primary reason why reinsurers assume no responsibility for rate of exchange risk?

a.

It does not affect the result of reinsurance

b.

It directly affects the result of reinsurance

c.

The insurer bears the consequences of rate of exchange risk

d.

The reinsurer has no control over rate of exchange risk

Answer: (d).The reinsurer has no control over rate of exchange risk Explanation:Reinsurers assume no responsibility for rate of exchange risk, despite the fact that it directly affects the result. The reason for this is that the reinsurer has no control over rate of exchange risk.

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Q. What is the primary reason why reinsurers assume no responsibility for rate of exchange risk?

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