Question

What is the primary purpose of participating in pools and ceding on an obligatory basis to national reinsurance organizations?

a.

To obtain favorable commission terms

b.

To reduce reliance on foreign reinsurance markets

c.

To increase the profitability of reinsurance programs

d.

To encourage competition among insurers

Posted under IC85 Reinsurance Management

Answer: (b).To reduce reliance on foreign reinsurance markets Explanation:Participating in pools and ceding on an obligatory basis to national reinsurance organizations are important measures to improve the national underwriting capacity and retentions. These measures aim to reduce the dependence on foreign reinsurance markets for expertise and increase the country's self-sufficiency in reinsurance. Therefore, option b is the correct answer.

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Q. What is the primary purpose of participating in pools and ceding on an obligatory basis to national reinsurance organizations?
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