Question

What is a surplus treaty?

a.

A treaty where the reinsurer accepts a portion of each risk in the portfolio

b.

A treaty where the ceding insurer retains a certain percentage of each risk in the portfolio

c.

A treaty where the reinsurer accepts only surplus risks

d.

A treaty where the ceding insurer agrees to pay a fixed commission to the reinsurer

Answer: (c).A treaty where the reinsurer accepts only surplus risks Explanation:In a surplus treaty, the reinsurer accepts only risks that exceed a certain amount, usually the ceding insurer's retention under the treaty.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What is a surplus treaty?

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. Can quota share and surplus methods be used together in a reinsurance treaty?

Q. What is the difference between net and gross lines in surplus treaty agreements?

Q. In a combined quota share and surplus treaty, what is the purpose of the ceding insurer's retention under the quota share treaty?

Q. When arranging a surplus treaty agreement in conjunction with a quota share treaty, why is it important to determine whether the surplus treaty is based on net or gross lines?

Q. _____________ is an automatic reinsurance agreement whereby the ceding insurer is bound to part with a fixed percentage of every risk written by it.

Q. What is proportional reinsurance?

Q. What is surplus reinsurance?

Q. What is bordereaux?

Q. What is the quota share treaty?

Q. What is the liability of the reinsurer under proportional treaty?

Q. In surplus reinsurance, a ceding insurer’s retention is known as ___________.

Q. In which of the following methods does the percentage of retained sum insured vary for different limits of sums insured and reduce with increase in the limit of sum insured?

Q. Which of the following details are not included in a list of bordereaux?

Q. In the Treaty, as a ‘document of agreement’, which of the following countries are normally excluded while listing territorial scope?

Q. Which of the following is incorrect with respect to reinsurance premium?

Recommended Subjects

Are you eager to expand your knowledge beyond IC85 Reinsurance Management? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!