Question

Which type of treaty programme is well suited for fire insurance business?

a.

Excess of loss treaties

b.

Proportional treaties

c.

Quota-share treaties

d.

Surplus treaties

Answer: (b).Proportional treaties Explanation:In view of a large number of risks usually involved in fire insurance business, it is well suited for protection by a proportional treaty programme. The primary objective of quota-share and surplus treaties is to iron out the variation in results that occur from year to year. Excess of loss treaties protect the net retained business by appropriate working and catastrophe excess of loss covers.

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Q. Which type of treaty programme is well suited for fire insurance business?

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