Reinsurance Support MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Reinsurance Support, a fundamental topic in the field of IC 92 Actuarial Aspects of Product Development. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Reinsurance Support MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Reinsurance Support mcq questions that explore various aspects of Reinsurance Support problems. Each MCQ is crafted to challenge your understanding of Reinsurance Support principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 92 Actuarial Aspects of Product Development tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Reinsurance Support MCQs are your pathway to success in mastering this essential IC 92 Actuarial Aspects of Product Development topic.

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Reinsurance Support MCQs | Page 4 of 8

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Q31.
What is a potential risk associated with systems and data in reinsurance?

a.

Calculation of premiums

b.

Identification of recoverable claims

c.

Both a and b

d.

None of the above

Discuss
Answer: (c).Both a and b Explanation:Systems and data risk in reinsurance includes the risk of incorrectly calculating premiums and failing to identify recoverable claims accurately.
Q32.
How are potential failures in administrative operations typically addressed in reinsurance agreements?

a.

By renegotiating the terms of the treaty

b.

By specifying remedies in the treaty

c.

By increasing reinsurance premiums

d.

By avoiding reinsurance arrangements altogether

Discuss
Answer: (b).By specifying remedies in the treaty Explanation:Potential failures in administrative operations in reinsurance agreements are typically addressed by specifying remedies in the treaty itself or through negotiations between the parties involved.
Q33.
Why is it important to manage data records consistently in reinsurance?

a.

To reduce reinsurance costs

b.

To streamline administrative operations

c.

To avoid potential disputes and errors

d.

To increase the complexity of reinsurance agreements

Discuss
Answer: (c).To avoid potential disputes and errors Explanation:Managing data records consistently in reinsurance is important to avoid potential disputes and errors that may arise from inconsistencies in data management.
Q34.
What factors influence the type of reinsurance used by a ceding company?

a.

The company's legal conditions

b.

The forms of reinsurance coverage available in the market

c.

Both a and b

d.

None of the above

Discuss
Answer: (c).Both a and b Explanation:The type of reinsurance used by a ceding company is influenced by factors such as the company's legal conditions and the forms of reinsurance coverage available in the market.
Q35.
What does the type of reinsurance depend on?

a.

The insurer's risk appetite

b.

The reinsurance premiums

c.

The reason for using reinsurance

d.

The geographical location of the ceding company

Discuss
Answer: (c).The reason for using reinsurance Explanation:The type of reinsurance depends on factors such as the reason for using reinsurance, the costs involved, the type of business, and the legal conditions applying to the reinsurance arrangement.
Q36.
What is Original terms (coinsurance) reinsurance?

a.

A method where the insurer shares all aspects of the original contract with the reinsurer

b.

A method where the reinsurer determines premium rates independently

c.

A method where the insurer sets premium rates for the reinsurer

d.

A method where the reinsurer assumes all risks without any input from the insurer

Discuss
Answer: (a).A method where the insurer shares all aspects of the original contract with the reinsurer Explanation:Original terms (coinsurance) reinsurance involves a sharing of all aspects of the original contract between the insurer and the reinsurer.
Q37.
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

Discuss
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.
Q38.
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

Discuss
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.
Q39.
Which type of reinsurance involves the reinsurer determining premium rates?

a.

Original terms (coinsurance) reinsurance

b.

Level risk premium reinsurance

c.

Risk premium reinsurance

d.

None of the above

Discuss
Answer: (b).Level risk premium reinsurance Explanation:In Level risk premium reinsurance, the reinsurer determines premium rates upon which the insurer can load its costs and profit.
Q40.
What distinguishes Risk premium reinsurance from other types?

a.

The reinsurer's assumption of all risks

b.

The guarantee of premium rates for the term of the policy

c.

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

d.

The sharing of all aspects of the original contract

Discuss
Answer: (c).The calculation of premium rates based on the reinsurer's assessment of risk Explanation:Risk premium reinsurance involves the reinsurer determining premium rates based on its assessment of risk, adding expense and profit margins.
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