Question

What is the purpose of a reinsurance contract?

a.

To provide coverage for the reinsurer's own losses

b.

To indemnify the ceding insurer for losses covered by the contract

c.

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

d.

To share profits between the ceding insurer and the reinsurer

Answer: (b).To indemnify the ceding insurer for losses covered by the contract 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.

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Q. What is the purpose of a reinsurance contract?

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