Question

How does the formation of market pools differ from group underwriting?

a.

Each insurer maintains their own net retention

b.

The business is redistributed among the group members

c.

The retention levels are significantly increased

d.

The administrative burden of reinsurance is reduced

Posted under IC85 Reinsurance Management

Answer: (a).Each insurer maintains their own net retention Explanation:Under the formation of market pools, each insurer keeps their own net retention and then cedes to the pool on a priority basis up to defined limits. This implies that individual insurers maintain their own retention levels while participating in the pool. Therefore, option a is the correct answer.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. How does the formation of market pools differ from group underwriting?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What is a key benefit of market pools?

View solution

Q. When can market pools be particularly effective?

View solution

Q. Why is it beneficial to involve professional reinsurers in reinsurance placements?

View solution

Q. What is a disadvantage of involving professional reinsurers in the first surplus treaty?

View solution

Q. How do professional reinsurers benefit ceding insurers?

View solution

Q. Why is it logical to provide professional reinsurers a share in basic treaties?

View solution

Q. Which of the following is correct with respect to market pool?

View solution

Q. What is the role of an intermediary in the reinsurance placement process?

View solution

Q. What is the primary function of an intermediary in reinsurance placement?

View solution

Q. What does the intermediary's brokerage cover?

View solution

Q. What is one benefit of using an intermediary in reinsurance placement?

View solution

Q. What distinguishes an intermediary from a professional reinsurer?

View solution

Q. Who is responsible for preparing the slip in reinsurance placement?

View solution

Q. What distinguishes lead underwriters in reinsurance placement?

View solution

Q. What is the role of the intermediary in reinsurance placement?

View solution

Q. What does the cover note in reinsurance placement summarize?

View solution

Q. Why is it unwise to place too large a share of the treaty with a reinsurer?

View solution

Q. What is the importance of continuity in relationships with reinsurers?

View solution

Q. What type of reinsurance examination is typically conducted for higher surpluses and facultative reinsurance?

View solution

Q. What should be considered when selecting a reinsurer for the placement of top surplus?

View solution
View All MCQs on IC85 Reinsurance Management

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!

Professional Communication

Hone your communication skills with our Professional Communication category. Enhance...

Non Verbal Reasoning

Enhance your cognitive abilities with our Non-Verbal Reasoning category. Dive into...

Fluid Mechanics

Unlock the mysteries of fluids and their behavior with our Fluid Mechanics category....

Food Engineering

Explore the fascinating world of Food Engineering with our specialized category....

Environment Management

Master the art of Environment Management with our specialized category. Explore...

General Knowledge

Expand your horizons and stay informed about the world with our General Knowledge...

Cell Biology

Delve into the fascinating world of Cell Biology with our specialized category....

Biochemistry

Delve into the intricate world of Biochemistry with our Biochemistry category....

Logical Reasoning

Enhance your logical thinking and decision-making abilities with our Logical...