Question

How does Risk premium reinsurance work?

a.

The reinsurer sets premium rates based on the insurer's assessment of risk

b.

The reinsurer determines premium rates independently

c.

The insurer guarantees premium rates for the term of the policy

d.

The reinsurer assumes all risks without any input from the insurer

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (a).The reinsurer sets premium rates based on the insurer's assessment of risk Explanation:In Risk premium reinsurance, the insurer reinsures part of the sum assured or the sum at risk based on the reinsurer's risk premium basis, which may or may not be guaranteed for the policy term.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. How does Risk premium reinsurance work?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

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

Q. How is excess of loss reinsurance organized into different levels?

View solution

Q. What is the purpose of catastrophe reinsurance?

View solution

Q. How does stop loss reinsurance work?

View solution

Q. What is Excess of Loss reinsurance?

View solution

Q. What is Catastrophe reinsurance?

View solution

Q. What is Stop Loss reinsurance?

View solution

Q. What is Financial reinsurance primarily used for?

View solution

Q. What are the two main types of reinsurance based on obligation?

View solution

Q. What is the primary characteristic of the surplus arrangement in reinsurance?

View solution

Q. How is the reinsurance premium calculated in the surplus arrangement?

View solution

Q. Why do insurers generally prefer the surplus method over the quota share method?

View solution

Q. What is a 'declined lives' treaty in reinsurance?

View solution

Q. What defines a declined life in reinsurance?

View solution

Q. What is the maximum percentage of the sum assured that insurers are required to reinsure with Indian reinsurers, as per IRDAI regulations?

View solution

Q. What requirement must insurers fulfill regarding reinsurance arrangements for catastrophe risks?

View solution

Q. When are insurers allowed to reinsure on quota share according to IRDAI regulations?

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!

Human Resource Management

Explore the dynamic field of Human Resource Management (HRM) with our dedicated...

Business Statistics

Uncover the power of data analysis with our Business Statistics category. Explore...

Human Anatomy and Physiology

Embark on a journey through the human body with our Human Anatomy and Physiology...

Marketing and Marketing Management

Uncover the strategies and tactics of marketing with our Marketing and Marketing...

IC 14 Regulations of Insurance Business

Prepare for the IC 14 Regulations of Insurance Business exam with our focused set of...

Logical Reasoning

Enhance your logical thinking and decision-making abilities with our Logical...

IC85 Reinsurance Management

Gear up for success in the Insurance Institute of India (III) examination with IC85...

Cytogenetics

Delve into the genetic mysteries of chromosomes with our Cytogenetics category....

Civil Engineering

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