Question

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

a.

Automatic acceptance of liability by the reinsurer

b.

Foregoing of certain rights by both parties

c.

Lower administrative costs than facultative reinsurance

d.

Review of individual risks by the reinsurer

Posted under IC85 Reinsurance Management

Answer: (d).Review of individual risks by the reinsurer Explanation:While treaty reinsurance does not require a review of individual risks by the reinsurer, it does require a careful review of the underwriting philosophy, practice, historical experience of the ceding insurer, as well as the management's general background, expertise, and planned objectives.

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