Question

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

a.

To provide coverage for the reinsurer's own lossesOne

b.

To indemnify the ceding insurer for losses covered by the contractTwo

c.

To provide coverage for risks outside the scope of the original insurance policyThree

d.

To share profits between the ceding insurer and the reinsurerFour

Posted under Forms of Reinsurance IC85 Reinsurance Management

Answer: (b).To indemnify the ceding insurer for losses covered by the contractTwo Explanation:A reinsurance contract is an agreement between an insurer and a reinsurer where the reinsurer agrees to indemnify the insurer for losses covered by the contract.There are two ways a reinsurance contract can be arranged: Facultative and Treaty.

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