Question

What risks does the reinsurer run by granting cover to as many companies as possible?

a.

Exposure to accumulation of risks from any single event or risk

b.

Exposure to financial risks in countries with deficit budgets

c.

Exposure to exchange controls in some countries

d.

Exposure to fiscal risks in countries where tax can be levied on ceded premiums, commissions, profit commissions, interest, and the settlement of losses

Posted under IC85 Reinsurance Management

Answer: (a).Exposure to accumulation of risks from any single event or risk Explanation:The reinsurer runs the risk of accumulation of exposure from any single event or risk when he grants cover to as many companies as possible. Though, on an important policy, direct participations are easily controlled, it is practically impossible to control indirect commitments from reinsurances as accepted.

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Q. What risks does the reinsurer run by granting cover to as many companies as possible?
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