Question

What is the purpose of excess of loss reinsurance?

a.

To indemnify the reinsured against a specified loss retention

b.

To provide proportional coverage for all types of losses

c.

To share the risk with the reinsured based on the loss amount

d.

To automatically renew coverage on the anniversary date

Posted under IC85 Reinsurance Management

Answer: (a).To indemnify the reinsured against a specified loss retention Explanation:Excess of loss reinsurance is a type of reinsurance that indemnifies the reinsured against all or a part of the amount of a loss that exceeds a specified loss retention. The purpose is to provide coverage for losses beyond the retention level.

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