Question

How do reinsurers overseas typically operate non-proportional accounts?

a.

On a funded basis

b.

With immediate transfer of surplus to revenue reserves

c.

By estimating outstanding claims for many years

d.

By matching accounted figures with treaty year results

Answer: (a).On a funded basis Explanation:Reinsurers overseas typically operate their non-proportional accounts on a funded basis. Each year, the fund is examined to ensure its adequacy with regard to outstanding claims. Any deficit in the fund is replaced by a transfer from revenue reserves. This approach helps address the challenge of long-duration claims reporting, where the eventual cost of claims may not be known for many years.

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Q. How do reinsurers overseas typically operate non-proportional accounts?

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