Question

What is "Run-Off Cancellation or Termination"?

a.

The process of transferring insurance liability from a ceding insurer to a reinsurer

b.

The termination of a reinsurance contract by the reinsurer

c.

The reduction of the amount owed by one party to another through setoff

d.

The provision in a reinsurance contract stating the reinsurer's continued liability for in-force policies after termination

Posted under IC85 Reinsurance Management

Answer: (d).The provision in a reinsurance contract stating the reinsurer's continued liability for in-force policies after termination Explanation:"Run-Off Cancellation or Termination" can be defined as a provision in the termination clause of a reinsurance contract. It states that the reinsurer shall remain liable for losses under reinsured policies in force at the date of termination due to occurrences taking place after the termination date. The run-off period is typically limited to twelve months.

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