Question

Which of the following statements is true about surplus reinsurance?

a.

The reinsurer assumes all the liabilities of the insurer

b.

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

c.

The reinsurer automatically accepts a certain liability for all risks falling within the scope of the agreement

d.

The ceding insurer may cede risks of any agreed class of insurance which the reinsurer must accept if ceded

Posted under IC85 Reinsurance Management

Answer: (b).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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Q. Which of the following statements is true about surplus reinsurance?
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