Question

When is quota share reinsurance protection typically used by a newly established insurer?

a.

When the insurer has a large amount of capital in relation to the insurance business they want to write.

b.

When the insurer is entering a new class of insurance business or a new territory.

c.

When the insurer has a large portfolio of a reasonable size.

d.

None of the above.

Answer: (b).When the insurer is entering a new class of insurance business or a new territory. Explanation:Quota share reinsurance protection is typically used by a newly established insurer with low capital in relation to the insurance business they want to write until such time they have built up a portfolio of a reasonable size. It is also used by a ceding insurer entering a new class of insurance business or a new territory.

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Q. When is quota share reinsurance protection typically used by a newly established insurer?

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