Question

What are some strategic uses of facultative reinsurance?

a.

To reinsure hazardous risks not protected by treaty arrangements

b.

To reduce the liability to treaty reinsurers on certain risks

c.

To provide extra capacity

d.

All of the above

Posted under Forms of Reinsurance IC85 Reinsurance Management

Answer: (d).All of the above Explanation:The strategic and widespread use of facultative reinsurance includes i. to reinsure hazardous risks not protected by treaty arrangements, ii. to reduce the liability to treaty reinsurers on certain risks, iii. to reduce the insurer's liability in a certain area, iv. to provide extra capacity and v. to obtain the reinsurer's advice on doubtful risks.

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Q. What are some strategic uses of facultative reinsurance?
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