Question

_____________is a device to transfer a part of business by an insurer to another insurer or reinsurer for a specified period and to appropriate the fund obtained by a transfer of business for policy reserves to strengthen its financial position

a.

Finite risk

b.

Contingent capital

c.

Financial reinsurance

d.

Multi-trigger cover

Posted under IC85 Reinsurance Management

Answer: (c).Financial reinsurance Explanation:Financial reinsurance is a device used by an insurer to transfer a portion of its business to another insurer or reinsurer for a specific period. The purpose of this transfer is to appropriate the funds obtained from the transfer of business to strengthen the insurer's financial position, particularly its policy reserves. Financial reinsurance helps the insurer manage its risk exposure and enhance its capital adequacy by shifting some of the liabilities associated with the transferred business to the reinsurer. This arrangement allows the insurer to free up capital and improve its financial stability.

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Q. _____________is a device to transfer a part of business by an insurer to another insurer or reinsurer for a specified period and to appropriate the fund obtained by a transfer of...
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