Question

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

a.

Against widely dispersed risks in agriculture

b.

Against exceeding an agreed loss ratio in a portfolio of net retained business

c.

Against weak reinsurance market conditions

d.

Against unbalanced exposure and premium in the aviation market

Answer: (b).Against exceeding an agreed loss ratio in a portfolio of net retained business Explanation:A stop loss ratio reinsurance arrangement aims to protect a whole portfolio of net retained business from exceeding an agreed loss ratio to ensure profit to the insurer.

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

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