Question

When is financial reinsurance considered a useful tool?

a.

When investment earnings are high

b.

When there is a substantial decrease in new business

c.

When there are situational changes in the investment climate

d.

When yearly revenues and expenses are unstable

Posted under IC85 Reinsurance Management

Answer: (c).When there are situational changes in the investment climate Explanation:Financial reinsurance is considered a useful tool in situations where earnings from investment are considerably reduced due to situational changes in the investment climate, or to get over a tentative financial strain, or to stabilize yearly revenues and expenses.

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