Question

What does the term "cede" refer to in the context of reinsurance?What is the key feature of a claims made basis in insurance or reinsurance contracts?

Passing on financial interests to reinsurersCoverage applies only to losses occurring in a specific period

Cancelling an insurance policyCoverage applies to losses occurring after the policy period

Increasing the liability of insurance policiesCoverage applies to losses regardless of the policy period

Reducing the reinsurer's participationCoverage applies to losses occurring before the policy period

Posted under IC85 Reinsurance Management

Answer: (a).Passing on financial interests to reinsurersCoverage applies only to losses occurring in a specific period Explanation:Cede" refers to the decision of the reinsured to pass on to a reinsurer all or part of their financial interests with the objective of reducing possible liability from insurance policies.A claims made basis provision in insurance or reinsurance contracts means that coverage applies only to losses that occur and for which claims are made during the period the policy is in force.

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Q. What does the term "cede" refer to in the context of reinsurance?What is the key feature of a claims made basis in insurance or reinsurance contracts?

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