Question

What is the purpose of retrocession in reinsurance?

a.

To protect the reinsurer from catastrophic losses.

b.

To decline certain risks that fall within the scope of the treaty.

c.

To purchase numerous treaties until the desired level of reinsurance protection is achieved.

d.

To provide automatic cover to the ceding insurer.

Answer: (a).To protect the reinsurer from catastrophic losses. Explanation:The purpose of retrocession in reinsurance is to protect the reinsurer from catastrophic losses.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What is the purpose of retrocession in reinsurance?

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

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?

Q. Is Facultative Obligatory Treaty a common type of reinsurance contract?

Q. Why is the ceding commission for Facultative Obligatory treaties progressively less than the quota share and surplus treaties?

Q. For what purposes is Facultative Obligatory Treaty used?

Q. ________________ is a contract of reinsurance whereby the ceding insurer may cede risks of any agreed class of insurance which the reinsurer must accept if ceded.

Q. What is the purpose of a reinsurance contract?How many ways can a reinsurance contract be arranged?

Q. What is the purpose of a reinsurance contract?

Q. What is the difference between proportional and non-proportional reinsurance?

Q. What is facultative reinsurance?

Q. Can facultative reinsurance be obtained before accepting to insure a client?

Q. What is treaty reinsurance?

Q. What is retrocession?

Q. Which of the following forms of reinsurance, reinsures risks on individual basis?

Q. In which of the following reinsurance contracts does the ceding insurer have the option to cede and the reinsurer have the option to accept a specific risk of a specific insured?

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!