Question

Which of the following statements about reinsurance is correct?

a.

Reinsurance is the insurance of the risk assumed by the insurer.

b.

Reinsurance is always a contract of indemnity, even in life and personal accident insurance, because it protects the insurer from a diminution of his property, caused by insurance policy obligations.

c.

Reinsurance is a separate contract between the insurer and the reinsurer. Each of these contracts is independent of the other.

d.

The relation between the insurer and the reinsurer is based on the principle of “Uberrima fides”, i.e. utmost good faith.

Posted under IC85 Reinsurance Management

Answer: (d).The relation between the insurer and the reinsurer is based on the principle of “Uberrima fides”, i.e. utmost good faith. Explanation:The principle of “Uberrima fides” means that both parties have to disclose all relevant information to each other, and it is a fundamental principle of insurance.

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Q. Which of the following statements about reinsurance is correct?
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