Question

What does a flat rate refer to in reinsurance?

a.

A rate applicable to excess limits

b.

A rate subject to subsequent adjustment

c.

A rate based on the ceding insurer's premium income

d.

A rate applicable to proportional coverage

Posted under IC85 Reinsurance Management

Answer: (c).A rate based on the ceding insurer's premium income Explanation:A flat rate in reinsurance refers to a fixed rate that is not subject to any subsequent adjustment. It is a reinsurance premium rate that is applicable to the entire premium income derived by the ceding insurer from the business ceded to the reinsurer.

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