Question

What is the purpose of a reinsurance programme for insurance business?

a.

To manifest various interests that form part of the corporate philosophy of an insurer

b.

To protect inward reinsurance

c.

To administer cash loss recovery facility

d.

To safeguard solvency against random fluctuations in overall claims experience and accumulation of losses

Answer: (d).To safeguard solvency against random fluctuations in overall claims experience and accumulation of losses Explanation:The purpose of a reinsurance programme for insurance business is to safeguard the solvency of an insurer against random fluctuations in the overall claims experience and an accumulation of losses arising out of one event.

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Q. What is the purpose of a reinsurance programme for insurance business?

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