Question

What is "Setoff" in the context of reinsurance?

a.

The reinsuring of reinsurance

b.

The process of reducing the amount owed between parties through crediting other obligations

c.

The calculation of risk-based capital requirements

d.

The termination of a reinsurance contract by the reinsurer

Posted under IC85 Reinsurance Management

Answer: (b).The process of reducing the amount owed between parties through crediting other obligations Explanation:"Setoff" is defined as the reduction of the amount owed by one party to another by crediting other obligations between them. It is a process used to determine the net amount owed between parties in various agreements or transactions.

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