Question

In what situations can a cut-through provision be used in reinsurance agreements?

a.

When the reinsurer is licensed in a particular country

b.

When the ceding insurer has a strong credit rating

c.

When the reinsurer intends to retain all the risk from the original policy

d.

When the reinsurer is in privity with the underlying insured

Posted under IC85 Reinsurance Management

Answer: (c).When the reinsurer intends to retain all the risk from the original policy Explanation:A cut-through provision in reinsurance agreements can be used in situations where the reinsurer intends to retain all the risk from the original policy, such as in a fronting arrangement or when the reinsurer is not licensed in a particular country. It allows the underlying insured to benefit as a beneficiary under the contract, providing access to the reinsurer's coverage and payments.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. In what situations can a cut-through provision be used in reinsurance agreements?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What is the purpose of drafting a cut-through provision in a specific way in reinsurance agreements?

View solution

Q. What is the purpose of an errors and omissions clause in reinsurance agreements?

View solution

Q. What does the term "Loss Occurrence" mean in reinsurance agreements?

View solution

Q. How is the duration and extent of a Loss Occurrence defined for catastrophes other than hurricanes, earthquakes, and volcanic eruptions?

View solution

Q. How does the Company determine the claim period in case a catastrophe involves multiple insured perils?

View solution

Q. What is the purpose of the index clause in the reinsurance agreement?

View solution

Q. Under what condition is the index clause not applied in the reinsurance agreement?

View solution

Q. How is the time of payment of any claim determined in the reinsurance agreement?

View solution

Q. What happens to the priority and liability in the index clause when the Index fluctuates by 10% or more?

View solution

Q. What is the condition precedent to any liability to pay under the reinsurance contract?

View solution

Q. What does the claims control clause in the policy state?What role does the lead Reinsurer have in the claims co-operation clause?

View solution

Q. What does the claims control clause in the policy state?

View solution

Q. How do the reinsurers follow the fortunes of the insurers in the claims control clause?

View solution

Q. Which of the following is excluded from coverage under the political risks exclusion clause?

View solution

Q. What is the definition of an act of terrorism as per the endorsement?

View solution

Q. What is the burden of proof in case the Reinsurer claims that a loss is excluded under the political risks exclusion clause?

View solution

Q. Which of the following is not excluded under the political risks exclusion clause?

View solution

Q. According to the terrorism exclusion clause, which of the following is true?

View solution

Q. How is "Terrorist Activity" defined under the terrorism exclusion clause?

View solution

Q. Which of the following activities or threats are associated with "Terrorist Activity" as per the exclusion clause?

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!

Basic Chemical Engineering

Get a solid foundation in Chemical Engineering with our Basic Chemical Engineering...

Power Plant Engineering

Embark on a journey through the fascinating domain of Power Plant Engineering, where...

Instrumentation Transducers

Master the art of instrumentation and transducers with our specialized category....

Mechatronics

Enter the world of integrated engineering systems with our Mechatronics category....

Human Resource Management

Explore the dynamic field of Human Resource Management (HRM) with our dedicated...

Professional Communication

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

General Knowledge

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

Verbal Ability

Hone your language and communication skills with our Verbal Ability category. Enhance...

Cytogenetics

Delve into the genetic mysteries of chromosomes with our Cytogenetics category....