Question

What is the quota share treaty?

a.

A treaty that puts in more level of exposure for lesser reinsurance premium ceded to reinsurers

b.

A treaty that assists for a higher ceding commission as compared to a surplus treaty

c.

A treaty that allows for a higher level of surplus, such as second and third surplus

d.

A treaty that has a lower ceding commission as compared with the first surplus treaty

Answer: (a).A treaty that puts in more level of exposure for lesser reinsurance premium ceded to reinsurers Explanation:A quota share treaty would assist for a higher ceding commission as compared to a surplus treaty as the latter puts in more level of exposure for lesser reinsurance premium ceded to reinsurers.

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Q. What is the quota share treaty?

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