Question

When is a quota share treaty typically used?

a.

For retrocession of reinsurance accounts

b.

For large accounts with a surplus

c.

For small accounts with excessive administrative burden

d.

For balancing the net retained portfolio of insurers

Answer: (c).For small accounts with excessive administrative burden Explanation:A quota share treaty is used mainly for small accounts where the extra administrative burden of a surplus would be too great.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. When is a quota share treaty typically used?

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What is the characteristic of a variable quota share treaty?

Q. What is the purpose of placing business facultatively in reinsurance?

Q. How does a Risk Excess cover operate?

Q. What is the purpose of a facultative obligatory treaty?

Q. Which type of treaty provides reinsurance protection on a layered basis?

Q. How are the lower layers of an excess of loss treaty rated?

Q. What does a stop loss ratio reinsurance arrangement aim to protect?

Q. Why do ceding insurers value reciprocal reinsurance trading?

Q. What are the benefits derived from a reciprocal exchange of treaties?

Q. Which type of insurers are able to exchange business against their first surplus property treaty?

Q. In which lines of business is reciprocal reinsurance trading widely prevalent?

Q. In which lines of business is reciprocal reinsurance trading widely prevalent?How does premium reciprocity vary based on profitability in reciprocal reinsurance trading?

Q. What is a potential danger in accepting a large premium reciprocity from a treaty with low average profitability?

Q. What are the advantages of larger premium reciprocity for the ceding insurer?

Q. What should be done to bring down the net profit ceded when accepting a large premium reciprocity?

Q. What impact should be considered when examining the terms of a treaty exchange through an intermediary?

Q. What can be concluded about the relationship between profitability and premium reciprocity in reciprocal reinsurance trading?

Q. What is the purpose of splitting the surplus treaty into two or three surpluses?

Q. What information do reinsurers typically want to know about rate levels and claims?

Q. In the placement of the second surplus treaty, what should be aimed for?

Recommended Subjects

Are you eager to expand your knowledge beyond IC85 Reinsurance Management? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!