Question

How can a well-planned reinsurance program ensure compliance of solvency norms?

a.

By increasing premium rates for direct business

b.

By limiting the insurer's total aggregate commitment from all underwriting lines

c.

By providing financial stability to insurers

d.

By ensuring long-term profitability

Posted under IC85 Reinsurance Management

Answer: (d).By ensuring long-term profitability Explanation:A well-planned reinsurance program can ensure long-term profitability as well as compliance of solvency norms, which limit the net retained premium income of insurance companies in relation to their capital and free reserves.

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