Question

What happens when the ceding insurer is in financial difficulties or insolvent?

a.

The reinsurer follows the ceding insurer's commercial fate

b.

The reinsurer shares the insurance fate with the insurer

c.

The reinsurer only follows the ceding insurer's fortunes from a technical point of view

d.

The reinsurer is not affected by the ceding insurer's financial difficulties

Posted under IC85 Reinsurance Management

Answer: (c).The reinsurer only follows the ceding insurer's fortunes from a technical point of view Explanation:When the ceding insurer is in financial difficulties or insolvent, the reinsurer only follows the ceding insurer's fortunes from a technical point of view, as stipulated in the treaties. The reinsurer only shares the "insurance fate" - in other words, he is not affected by the insurer's "commercial fate".

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Q. What happens when the ceding insurer is in financial difficulties or insolvent?
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