Question

What is surplus reinsurance?

a.

The original insurer decides what part of the original insurance he wishes to retain for his own account and reinsures the balance with a reinsurer.

b.

The reinsurer covers only a specific type of risk.

c.

The reinsurer provides coverage for all risks falling within the scope of the agreement.

d.

The reinsurer covers the entire liability of the insurer.

Posted under IC85 Reinsurance Management

Answer: (a).The original insurer decides what part of the original insurance he wishes to retain for his own account and reinsures the balance with a reinsurer. Explanation:In surplus reinsurance, the original insurer decides what part of the original insurance he wishes to retain for his own account and reinsures (cedes) the balance with a reinsurer.

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