Question

A credit rating of a reinsurer does not consider:

a.

Deductibles and surrender penalties

b.

Timeliness of payment

c.

Likelihood of fraudulent claims

d.

Business continuity and ability to settle

Answer: (c).Likelihood of fraudulent claims Explanation:The credit rating opinion does not address the likelihood of the use of a defense such as fraud to deny claims. It focuses on the financial strengths and security characteristics of the reinsurer regarding their ability to pay under insurance policies and contracts.

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Q. A credit rating of a reinsurer does not consider:

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