Question

What is the status of the ceding insurer under an excess of loss reinsurance contract?What is the basis on which excess of loss reinsurance contracts are formed?

a.

ReinsuredProportional shares of the original sum insured, premium and claims on any one risk

b.

ReinsurerThe amount of loss being reinsured

c.

InsuredThe commission paid to agents and brokers

d.

BrokerThe territorial scope

Posted under IC85 Reinsurance Management

Answer: ReinsuredThe amount of loss being reinsured Explanation:The status of the ceding insurer under an excess of loss reinsurance contract is that of a reinsured. They seek protection to mitigate a loss beyond their chosen limit of loss retention.Excess of loss reinsurance contracts are formed on the basis of the amount of loss being reinsured, unlike proportional reinsurance contracts which are based on proportional shares of the original sum insured, premium and claims on any one risk.

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Q. What is the status of the ceding insurer under an excess of loss reinsurance contract?What is the basis on which excess of loss reinsurance contracts are formed?
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