Question

What is Excess of loss reinsurance?

a.

A type of reinsurance where the reinsurer agrees to pay any loss on an individual risk

b.

A type of reinsurance where the reinsurer agrees to pay aggregate loss from any one occurrence of an event

c.

A type of reinsurance where the reinsurer agrees to pay for losses exceeding a certain threshold

d.

A type of reinsurance where the reinsurer agrees to pay only for catastrophic events

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).A type of reinsurance where the reinsurer agrees to pay for losses exceeding a certain threshold Explanation:Excess of loss reinsurance involves the reinsurer agreeing to pay for losses exceeding a certain predetermined threshold.

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