Question

What is the purpose of the cash loss recovery facility in outward arrangements?

a.

To provide liquidity to the insurer

b.

To ensure adequate cover for the gross account

c.

To generate good reciprocal inward business

d.

To reduce the cost of reinsuring

Answer: (a).To provide liquidity to the insurer Explanation:The cash loss recovery facility is administered in all outward arrangements to help the insurer keep their well-invested funds intact and eliminate the strain arising from substantial gross payments that need to be made immediately in respect of risks that are retained marginally. Therefore, the purpose of the cash loss recovery facility is to provide liquidity to the insurer.

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Q. What is the purpose of the cash loss recovery facility in outward arrangements?

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