Question

What is the purpose of working (risk) excess of loss reinsurance?

a.

To limit losses that arise on the reinsured’s day-to-day operations

b.

To protect the reinsured against catastrophic events

c.

To protect the reinsured against adverse underwriting results

d.

To provide proportional coverage to the ceding insurer

Answer: (a).To limit losses that arise on the reinsured’s day-to-day operations Explanation:Working (Risk) Excess of Loss (XL) reinsurance is intended to limit losses that arise on the reinsured’s day-to-day operations. It caters to the reinsured’s need for protection against number of losses that arise out of a single accident, occurrence or event.

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Q. What is the purpose of working (risk) excess of loss reinsurance?

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