Question

What is the impact of captives on the position of the insurer in relation to the parent group?

a.

The insurer becomes the reinsurer to the parent group.

b.

The insurer remains separate from the parent group.

c.

The insurer provides coverage exclusively to captives.

d.

The insurer loses its reinsurance capacity.

Answer: (a).The insurer becomes the reinsurer to the parent group. Explanation:Captives have caused a shift in the position of the insurer, making it the reinsurer to the parent group. This means that the captive insurance entities within the parent group require reinsurance, and the insurer provides this reinsurance coverage.

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Q. What is the impact of captives on the position of the insurer in relation to the parent group?

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