Introduction MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Introduction, a fundamental topic in the field of IC85 Reinsurance Management. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Introduction 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 Introduction mcq questions that explore various aspects of Introduction problems. Each MCQ is crafted to challenge your understanding of Introduction principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC85 Reinsurance Management tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Introduction MCQs are your pathway to success in mastering this essential IC85 Reinsurance Management topic.

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Introduction MCQs | Page 4 of 13

Discover more Topics under IC85 Reinsurance Management

Q31.
What is the relationship between reinsurance and insurance?

a.

Reinsurance has developed from insurance

b.

Reinsurance is a completely separate industry from insurance

c.

Insurance and reinsurance have no relationship with each other

d.

Reinsurance is a type of insurance policy that covers losses incurred by an insurer

Discuss
Answer: (a).Reinsurance has developed from insurance Explanation:Reinsurance has developed from insurance and is based on the same principle of risk sharing. Insurers use reinsurance to reduce their exposure to risk and protect their financial stability.
Q32.
What determines the amount of reinsurance business that can be transacted?

a.

The volume of direct business available

b.

The number of reinsurers in the market

c.

The profitability of the insurance industry

d.

The type of risks being underwritten by the insurer

Discuss
Answer: (a).The volume of direct business available Explanation:The volume of reinsurance business that can be transacted depends primarily upon the volume of direct business available at any given time. Insurers only seek reinsurance when they have exceeded their capacity to handle risks on their own.
Q33.
When did the idea of reinsurance first emerge?

a.

In the same period as the emergence of insurance

b.

In the early 19th century

c.

In the 16th century

d.

In the late 18th century

Discuss
Answer: (a).In the same period as the emergence of insurance Explanation:The idea of reinsurance is rooted in the same human instinct that brought insurance into being, i.e. the desire that the loss of one shall be shared by many. In the early days of insurance, insurers only accepted risks that they could handle on their own, but eventually, the concept of reinsurance emerged as a way to spread risk further.
Q34.
What was the first known reinsurance contract in marine insurance?

a.

Concluded in 1370 in Genoa

b.

Concluded in 1681 in France

c.

Concluded in 1746 in Europe

d.

Concluded in 1864 in the UK

Discuss
Answer: (a).Concluded in 1370 in Genoa Explanation:The oldest known reinsurance contract in marine insurance was concluded in 1370 in Genoa. Reinsurance was later indirectly referred to in legal texts in 1681 in the ordinances of Louis XIV and directly in 1746.
Q35.
When was the first reinsurance contract in fire insurance business concluded?

a.

1778

b.

1681

c.

1821

d.

1864

Discuss
Answer: (c).1821 Explanation:The earliest reference to reinsurance in fire insurance business is found in a Royal concession granted to the Royal Chartered Insurance Insurer of Copenhagen in 1778, but the first reinsurance contract in fire insurance business was concluded in 1821.
Q36.
What is the significance of reinsurance in the business of insurance?

a.

It is of no importance.

b.

It is of considerable importance.

c.

It is important only for specialized insurers.

d.

It is important only for direct insurers.

Discuss
Answer: (b).It is of considerable importance. Explanation:Reinsurance is of considerable importance in the business of insurance.
Q37.
What is the idea behind reinsurance?

a.

To reduce the number of risks underwritten by the insurer.

b.

To increase the insurer's profits.

c.

To share the loss of one among many.

d.

To eliminate the need for insurance.

Discuss
Answer: (c).To share the loss of one among many. Explanation:The idea behind reinsurance is to share the loss of one among many.
Q38.
When was the oldest known reinsurance contract in marine insurance concluded?

a.

1370

b.

1746

c.

1778

d.

1821

Discuss
Answer: (a).1370 Explanation:The oldest known reinsurance contract in marine insurance was concluded in 1370 in Genoa.
Q39.
When was the Swiss Reinsurance Company established?

a.

1846

b.

1863

c.

1880

d.

1917

Discuss
Answer: (b).1863 Explanation:The Swiss Reinsurance Company was established in 1863.
Q40.
When was the first professional reinsurance insurer established in England?

a.

1846

b.

1863

c.

1880

d.

1917

Discuss
Answer: (d).1917 Explanation:The first professional reinsurance insurer in England was established in 1917.
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