Question
a.
Treaty reinsurance is a contract where the reinsurer has the option to accept or decline risksTreaty reinsurance provides automatic cover
b.
Facultative reinsurance provides automatic cover for all risksTreaty reinsurance requires review of individual risks by the reinsurer
c.
Treaty reinsurance automatically accepts all risks falling within the scope of the agreementFacultative reinsurance guarantees a definite amount of reinsurance protection on every risk which the insurer accepts
d.
Treaty reinsurance only covers a specific risk or policyTreaty reinsurance does not require a careful review of the underwriting philosophy
Posted under IC85 Reinsurance Management
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Q. What is the key difference between facultative and treaty reinsurance?Why are the administrative costs lower in treaty reinsurance than in facultative reinsurance?
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