Question

What is Level risk premium reinsurance?

a.

A method where the reinsurer sets premium rates for the insurer to use

b.

A method where the insurer determines premium rates independently

c.

A method where the reinsurer guarantees premium rates for the term of the policy

d.

A method where the insurer shares only a portion of the risk with the reinsurer

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (a).A method where the reinsurer sets premium rates for the insurer to use Explanation:Level risk premium reinsurance is a method where the reinsurer supplies the insurer with a set of premium rates upon which the insurer can load its costs and profit, typically with smaller margins than retail rates.

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