Question

What is the purpose of the "Access to records: Inspection by reinsurer" clause in a reinsurance agreement?

a.

To allow for amendments to the agreement

b.

To protect the reinsurer from losses caused by the ceding insurer's insolvency

c.

To facilitate the inspection of books and records by the reinsurer

d.

To restrict the reinsurer's access to records during arbitration

Posted under IC85 Reinsurance Management

Answer: (c).To facilitate the inspection of books and records by the reinsurer Explanation:The purpose of the "Access to records: Inspection by reinsurer" clause is to give the reinsurer the right to inspect any relevant books or records of the ceding insurer. The inspection must be carried out during normal office hours and remains available to the reinsurer as long as any liability under the reinsurance remains unsettled.

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