Question

What is the function of excess of loss reinsurance protection?

a.

To protect the net underwriting result

b.

To limit the commitment from all underwriting lines

c.

To protect the insurer's total aggregate commitment

d.

Both a and b

Posted under IC85 Reinsurance Management

Answer: (d).Both a and b Explanation:Excess of loss reinsurance protection operates when claims have occurred under several lines of business as a result of the same event. It helps the insurer limit their total aggregate commitment from all underwriting lines and protect their net underwriting result.

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