Question

What is the capacity of an insurer to accept risks with reinsurance support?

a.

The same as without reinsurance support

b.

Greater than without reinsurance support

c.

Lesser than without reinsurance support

d.

Dependent on the type of reinsurance support provided

Answer: (b).Greater than without reinsurance support Explanation:An insurer has more capacity to accept risk with reinsurance support, although the exposure needs to be restricted to a level commensurate with its own net resources.

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Q. What is the capacity of an insurer to accept risks with reinsurance support?

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