Question

Why would a ceding insurer transacting business in the USA negotiate a separate treaty for such business?

a.

Because the legal systems and insurance practices in the USA are the same as in other countries covered by the treaty

b.

Because the nature of business involved in the USA is different from that covered by the treaty

c.

Because the USA is not included in the territorial scope of the treaty

d.

Because marine and aviation treaties usually have a ‘worldwide’ scope

Posted under IC85 Reinsurance Management

Answer: (c).Because the USA is not included in the territorial scope of the treaty Explanation:The United States of America and Canada exposures are usually excluded from treaties with worldwide scope because of the different legal systems and insurance practices prevailing in those countries. Therefore, a ceding insurer transacting business in the USA would negotiate a separate treaty for such business.

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Q. Why would a ceding insurer transacting business in the USA negotiate a separate treaty for such business?
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