Question

What is the deductible in an excess of loss reinsurance contract?

a.

The amount of loss being reinsured

b.

The amount of premium paid by the reinsurer

c.

The amount of loss paid by the reinsured

d.

The amount of risk ceded by the ceding insurer

Answer: (a).The amount of loss being reinsured Explanation:Under Excess of Loss contracts, the reinsurer agrees to indemnify the reinsured for losses that exceed a specified monetary amount identified by the reinsured. Such an identified amount is the deductible also known as ‘excess’ or ‘priority’ or ‘underlying’.

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Q. What is the deductible in an excess of loss reinsurance contract?

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