Question

How do retention limits influence the decision to reinsure?

a.

By decreasing regulatory capital requirements

b.

By minimizing familiarity with underwriting

c.

By increasing profit-sharing arrangements

d.

By impacting the stability of free asset ratio

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (d).By impacting the stability of free asset ratio Explanation:Retention limits influence the decision to reinsure by impacting the stability of the insurer's free asset ratio, among other factors such as insurance risk appetite, free assets level, and regulatory capital requirements.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. How do retention limits influence the decision to reinsure?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What factors should be considered when setting retention limits for reinsurance?

View solution

Q. What is the key decision in determining the level of retention limits for insurers?

View solution

Q. How does reinsurance impact the return on capital for insurers?

View solution

Q. What term describes the situation where an insurer remains liable to policyholders even if the reinsurer becomes insolvent?

View solution

Q. How can the exposure to counterparty risk be mitigated?

View solution

Q. What legal framework governs reinsurance agreements?

View solution

Q. Why is achieving contract certainty important in reinsurance agreements?

View solution

Q. What is the focus of regulators regarding reinsurance treaties?

View solution

Q. What is a potential risk associated with systems and data in reinsurance?

View solution

Q. How are potential failures in administrative operations typically addressed in reinsurance agreements?

View solution

Q. Why is it important to manage data records consistently in reinsurance?

View solution

Q. What factors influence the type of reinsurance used by a ceding company?

View solution

Q. What does the type of reinsurance depend on?

View solution

Q. What is Original terms (coinsurance) reinsurance?

View solution

Q. What is Level risk premium reinsurance?

View solution

Q. How does Risk premium reinsurance work?

View solution

Q. Which type of reinsurance involves the reinsurer determining premium rates?

View solution

Q. What distinguishes Risk premium reinsurance from other types?

View solution

Q. What is Excess of loss reinsurance?

View solution

Q. What distinguishes catastrophe reinsurance from stop loss reinsurance?

View solution
View All MCQs on IC 92 Actuarial Aspects of Product Development

Recommended Subjects

Are you eager to expand your knowledge beyond IC 92 Actuarial Aspects of Product Development? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Civil Engineering

Dive into the world of Civil Engineering with our specialized category. Explore the...

Textile Engineering

Explore the dynamic world of Textile Engineering with our specialized category. Delve...

Data Interpretation

Master the art of data analysis and interpretation with our Data Interpretation...

International Relations

Navigate the complex world of International Relations with our dedicated category....

Bioinformatics

Unlock the power of data analysis in biology with our Bioinformatics category....

Mechatronics

Enter the world of integrated engineering systems with our Mechatronics category....

Heat Transfer

Explore the fascinating world of heat transfer with our Heat Transfer category....

Highway Engineering

Navigate the road to efficient transportation with our Highway Engineering category....

Molecular Biology

Dive into the intricate world of molecular biology with our specialized category....