Question

Why are descriptions such as “all classes of business transacted in the fire department” not readily accepted in treaties?

a.

They do not provide enough detail on the classes of business covered

b.

They are too specific and limit the coverage of the treaty

c.

They can lead to covers which were never intended by the reinsurer

d.

They are too broad and cover risks that are not within the scope of the treaty

Posted under IC85 Reinsurance Management

Answer: (c).They can lead to covers which were never intended by the reinsurer Explanation:These wordings are not readily accepted as the emergence and inclusion of new types of add-on covers can lead to covers which were never intended by the reinsurer.

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Q. Why are descriptions such as “all classes of business transacted in the fire department” not readily accepted in treaties?
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