Question

What is the main advantage of facultative reinsurance?

a.

Lower administrative costs

b.

Flexibility to reinsure hazardous risks not protected by treaty arrangements

c.

Greater capacity to reinsure multiple risks

d.

Provides coverage for all policies of an insurer

Answer: (b).Flexibility to reinsure hazardous risks not protected by treaty arrangements Explanation:The main advantage of facultative reinsurance is its flexibility, which has resulted in its strategic and widespread use to reinsure hazardous risks not protected by treaty arrangements.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What is the main advantage of facultative reinsurance?

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What are the limitations of facultative reinsurance?

Q. What are the considerations for a single Mega Risk Facultative Reinsurance Placement?

Q. Which of the following is correct with respect to facultative reinsurance?

Q. What is treaty reinsurance?

Q. What are the two ways in which treaty reinsurance may be transacted?

Q. What is the key difference between facultative and treaty reinsurance?Why are the administrative costs lower in treaty reinsurance than in facultative reinsurance?

Q. What is the key difference between facultative and treaty reinsurance?

Q. What is a formal treaty wording?

Q. Which of the following is not a characteristic of treaty reinsurance?

Q. Which of the following is typically described in a formal treaty wording for treaty reinsurance?

Q. How does an insurer achieve the desired level of reinsurance protection in treaty reinsurance?

Q. What is retrocession in reinsurance?

Q. What is the purpose of retrocession in reinsurance?

Q. What is Treaty Reinsurance?

Q. What are the two types of basis on which Treaty reinsurance may be transacted?

Q. What rights does each party forego in a Treaty Reinsurance agreement?

Q. What is a formal treaty wording in Treaty Reinsurance?

Q. What is the advantage of Treaty reinsurance over Facultative reinsurance in terms of administrative costs?

Q. ABC is a reinsurance company. It gets into a contract with another reinsurance company: XYZ Reinsurance Co. Ltd. Such contracts between two reinsurance companies are known as _______________

Q. What is Facultative Obligatory Treaty?

Recommended Subjects

Are you eager to expand your knowledge beyond IC85 Reinsurance Management? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!