Question

What is "Reinstatement" in the context of reinsurance?

a.

The process of sharing premiums and losses in quota-share reinsurance

b.

The restoration of a reinsurance limit to its full amount after a loss payment

c.

The language that describes the coverage agreed upon by the parties in a reinsurance contract

d.

The mutual exchange of reinsurance between parties

Posted under IC85 Reinsurance Management

Answer: (b).The restoration of a reinsurance limit to its full amount after a loss payment Explanation:"Reinstatement" refers to the restoration of the reinsurance limit of an excess property treaty to its full amount after the reinsurer has made a loss payment due to an occurrence.

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