Question

What is facultative reinsurance?

a.

A method of reinsuring risks on an individual basis where the insurer has the obligation to cede a risk from an original insured

b.

A method of reinsuring risks on an individual basis where the reinsurer has the option of accepting or declining each proposal

c.

A method of reinsuring risks on a group basis where the reinsurer has the obligation to accept a defined group of policies

d.

A method of reinsuring risks on a group basis where the insurer has the option of ceding a defined group of policies

Posted under IC85 Reinsurance Management

Answer: (b).A method of reinsuring risks on an individual basis where the reinsurer has the option of accepting or declining each proposal Explanation:Facultative reinsurance is a method of reinsuring risks on an individual basis where the reinsurer has the option of accepting or declining each proposal.

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