Question

What is reinsurance?

a.

An extension of insurance to cover risks beyond the capacity of a single insurer

b.

A type of insurance only available to large corporations

c.

A form of insurance designed to cover maritime risks

d.

A type of insurance that only covers specific types of risks

Posted under IC85 Reinsurance Management

Answer: (a).An extension of insurance to cover risks beyond the capacity of a single insurer Explanation:Reinsurance is the practice of one insurer (the reinsurer) assuming all or part of the risk covered under a policy issued by another insurer (the ceding company), in exchange for a premium payment. Reinsurance allows the ceding company to spread its risk and reduce its exposure to losses.

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