Question

What is "Pro Rata Reinsurance"?

a.

Reinsurance that shares a proportional part of ceded insurance liability, premiums, and losses of the ceding insurer

b.

Reinsurance that transfers all insurance liability to the reinsurer

c.

Reinsurance that covers only a portion of the ceding insurer's losses

d.

Reinsurance that allows the reinsurer to assume excess liability beyond the limits of the ceding insurer

Posted under IC85 Reinsurance Management

Answer: (a).Reinsurance that shares a proportional part of ceded insurance liability, premiums, and losses of the ceding insurer Explanation:"Pro Rata Reinsurance" refers to both quota share and surplus share reinsurance. In this type of reinsurance, the reinsurer shares a proportional part of the ceded insurance liability, premiums, and losses of the ceding insurer.

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