Reinsurance MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Reinsurance, a fundamental topic in the field of IC22 Life Insurance Underwriting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Reinsurance 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 mcq questions that explore various aspects of Reinsurance problems. Each MCQ is crafted to challenge your understanding of Reinsurance principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC22 Life Insurance Underwriting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Reinsurance MCQs are your pathway to success in mastering this essential IC22 Life Insurance Underwriting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Reinsurance. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Reinsurance knowledge to the test? Let's get started with our carefully curated MCQs!

Reinsurance MCQs | Page 9 of 9

Discover more Topics under IC22 Life Insurance Underwriting

Q81.
What factors affect the retention limit?

a.

Risk appetite and size of the company.

b.

Quality and experience of underwriters.

c.

Surplus of the direct company.

d.

All of the above.

Discuss
Answer: (d).All of the above. Explanation:Retention limit depends on factors like risk appetite and size of the company, quality and experience of underwriters, surplus of the direct company etc.
Q82.
What is retrocession?

a.

The process in which a ceding company transfers part of its risk to a reinsurer.

b.

The process in which a reinsurer transfers part of its risk to a ceding company.

c.

The process in which a reinsurer transfers part of its risk to another reinsurer.

d.

The process in which a policyholder transfers part of its risk to the insurer.

Discuss
Answer: (c).The process in which a reinsurer transfers part of its risk to another reinsurer. Explanation:Retrocession is a process in which a reinsurer reinsures its risks with another reinsurer. Retrocession is the reinsuring of reinsurance.
Q83.
Who is responsible for paying the claim if the reinsurer fails to pay?

a.

The policyholder.

b.

The reinsurer.

c.

The direct insurer.

d.

The retrocessionaire.

Discuss
Answer: (c).The direct insurer. Explanation:The contract of the policyholder is with the direct insurer. If reinsurers fail to pay a claim for any reason, the liability for full payment of the claim rests with the direct insurer.
Q84.
What is catastrophe reinsurance?

a.

Reinsurance for protecting insurance companies against large mortality claims coming at a single point of time

b.

Reinsurance for protecting insurance companies against natural disasters like tsunamis, earthquakes, volcanoes, etc.

c.

Reinsurance for protecting insurance companies against wars and conflicts.

d.

Reinsurance for protecting insurance companies against liability claims.

Discuss
Answer: (a).Reinsurance for protecting insurance companies against large mortality claims coming at a single point of time Explanation:Catastrophe reinsurance is a type of reinsurance that helps insurance companies protect themselves against large and unexpected losses resulting from catastrophic events, such as natural disasters or terrorist attacks. Its primary purpose is to limit the exposure of the insurance company to such catastrophic events and to ensure that it has sufficient financial resources to meet its obligations to policyholders in the event of a major disaster. Catastrophe reinsurance generally covers mortality risks due to natural disasters like hurricanes, earthquakes, floods, etc., but may exclude risks due to wars or conflicts.
Page 9 of 9