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 7 of 8

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Q61.
What requirement must be met by reinsurers for insurers to place their reinsurance business outside India?

a.

BBB credit rating with Standard & Poor for the past 5 years

b.

A credit rating equivalent to BBB with any international rating agency

c.

Both a and b

d.

None of the above

Discuss
Answer: (c).Both a and b Explanation:Insurers shall place their reinsurance business outside India with reinsurers who have enjoyed a credit rating of at least BBB (with Standard & Poor) or an equivalent rating with any other international rating agency for the past five years.
Q62.
According to IRDAI regulations, when can insurers reinsure on a quota share basis?

a.

Only for health insurance business

b.

Only for life insurance business

c.

In the initial two years of starting operations for health insurance and group term insurance business

d.

In the initial two years of introducing a new risk/product for health insurance and group term insurance business

Discuss
Answer: (d).In the initial two years of introducing a new risk/product for health insurance and group term insurance business Explanation:Insurers may be allowed to reinsure on quota share basis in the initial two years of introducing a new risk/product for health insurance and group term insurance business, as per IRDAI regulations.
Q63.
Which of the following is a requirement for life insurers when placing business with reinsurers, according to IRDAI regulations?

a.

Consideration of past claims performance of the reinsurers

b.

Ensuring the reinsurer's participation in the reinsurance program

c.

Both a and b

d.

Neither a nor b

Discuss
Answer: (c).Both a and b Explanation:Before placing business with reinsurers, life insurers must consider the past claims performance of the reinsurers, as available, and ensure their participation in the reinsurance program, as per IRDAI regulations.
Q64.
What is the purpose of the Insurance Regulatory and Development Authority of India (Registration and Operations of Branch Offices of Foreign Reinsurers other than Lloyd’s) (First Amendment) Regulations, 2016?

a.

To regulate the operations of Lloyd’s in India

b.

To amend regulations regarding foreign reinsurers in India

c.

To establish branch offices for foreign reinsurers in India

d.

None of the above

Discuss
Answer: (b).To amend regulations regarding foreign reinsurers in India Explanation:The purpose of the Insurance Regulatory and Development Authority of India (Registration and Operations of Branch Offices of Foreign Reinsurers other than Lloyd’s) (First Amendment) Regulations, 2016 is to amend regulations regarding foreign reinsurers in India.
Q65.
According to the amended regulations, what is the minimum retention requirement for Category I foreign reinsurers maintaining a branch office in India?

a.

20%

b.

30%

c.

40%

d.

50%

Discuss
Answer: (d).50% Explanation:Regulation 4 specifies that Category I foreign reinsurers maintaining a branch office in India must maintain a minimum retention of 50% of the Indian reinsurance business.
Q66.
What amendment is made in Regulation 16(g) of the regulations?

a.

Addition of the words "to the extent possible"

b.

Omission of the words "to the extent possible"

c.

Change of wording from "its operations" to "its branches"

d.

None of the above

Discuss
Answer: (b).Omission of the words "to the extent possible" Explanation:In Regulation 16(g), the words "to the extent possible" after the words "in its operations" are omitted.
Q67.
According to the amended Regulation 28(9), what is the order of preference for offering best terms for participation in reinsurance?

a.

First to overseas reinsurers, then to Indian reinsurers

b.

First to Indian reinsurers, then to overseas reinsurers

c.

First to branch offices of foreign reinsurers, then to Indian reinsurers

d.

None of the above

Discuss
Answer: (b).First to Indian reinsurers, then to overseas reinsurers Explanation:The amended Regulation 28(9) states that Indian insurers shall offer the best terms for participation first to Indian reinsurers, then to overseas reinsurers.
Q68.
What action will the Authority undertake after a period of one year based on the reporting's made to it?

a.

Review the working of Regulation 28(9)

b.

Amend Regulation 28(9) to include additional clauses

c.

Introduce new regulations for reinsurance

d.

None of the above

Discuss
Answer: (a).Review the working of Regulation 28(9) Explanation:The Authority will undertake a review of the working of Regulation 28(9) after a period of one year based on the reporting's made to it.
Q69.
What is the purpose of the amendment in Regulation 28(9)?

a.

To simplify the reinsurance process for Indian insurers

b.

To ensure that Indian insurers obtain the best terms for their reinsurance surpluses

c.

To increase the participation of overseas reinsurers in the Indian reinsurance market

d.

None of the above

Discuss
Answer: (b).To ensure that Indian insurers obtain the best terms for their reinsurance surpluses Explanation:The amendment in Regulation 28(9) aims to ensure that Indian insurers obtain the best terms for their facultative and treaty surpluses from Indian reinsurers and overseas reinsurers.
Q70.
Which statement best defines reinsurance?

a.

Reinsurance is a method for insurers to avoid risks entirely.

b.

Reinsurance is an arrangement to minimize an insurer's risks by transferring them to another insurer.

c.

Reinsurance is a process for insurers to increase their profits.

d.

Reinsurance is a strategy for insurers to increase their premiums.

Discuss
Answer: (b).Reinsurance is an arrangement to minimize an insurer's risks by transferring them to another insurer. Explanation:Reinsurance involves transferring a portion of an insurer's risks to another insurer, known as a reinsurer, to minimize the original insurer's exposure to losses.
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