Question

If a loss occurs before the cession is made, what is the reinsurer's liability?

a.

The reinsurer is not liable for any portion of the loss

b.

The reinsurer is liable only for the proportion that would have been ceded

c.

The reinsurer is liable for the entire loss

d.

The reinsurer's liability is limited to the amount of the ceding commission

Answer: (b).The reinsurer is liable only for the proportion that would have been ceded Explanation:If a loss should occur before the cession was made, the reinsurer will still be liable for the proportion that would have been ceded.

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Q. If a loss occurs before the cession is made, what is the reinsurer's liability?

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