Inward Reinsurance Business MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Inward Reinsurance Business, 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 Inward Reinsurance Business 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 Inward Reinsurance Business mcq questions that explore various aspects of Inward Reinsurance Business problems. Each MCQ is crafted to challenge your understanding of Inward Reinsurance Business 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 Inward Reinsurance Business MCQs are your pathway to success in mastering this essential IC85 Reinsurance Management topic.

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Inward Reinsurance Business MCQs | Page 7 of 8

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Q61.
What is the requirement for monitoring the results of each acceptance and the inward portfolio in inward reinsurance?

a.

Suitable underwriting policy

b.

Retrocession arrangement

c.

Management Information System

d.

Reciprocal trading

Discuss
Answer: (c).Management Information System Explanation:A suitable management information system is required to be in place in order to constantly monitor the results of each acceptance and the inward portfolio as a whole in inward reinsurance.
Q62.
In what scenario is retrocessional support particularly influential in inward reinsurance?

a.

When market is hard

b.

When market is soft

c.

When market is stable

d.

When market is unpredictable

Discuss
Answer: (a).When market is hard Explanation:The absence of retrocessional support, when the market is hard, exerts a significant influence on the rate quoted by the lead underwriter as the primary reinsurer.
Q63.
In what scenario is retrocessional support particularly influential in inward reinsurance?Which type of reinsurance trading is considered important by ceding insurers?

a.

When market is hardRetrocession trading

b.

When market is softReciprocal trading

c.

When market is stableExcess of loss trading

d.

When market is unpredictableSurplus trading

Discuss
Answer: (b).When market is hardReciprocal trading Explanation:The absence of retrocessional support, when the market is hard, exerts a significant influence on the rate quoted by the lead underwriter as the primary reinsurer.Reciprocal reinsurance trading is considered important by ceding insurers, and they value their outward treaties that form the basis of their reciprocal trading.
Q64.
According to IRDA Regulations, which insurers can write inward reinsurance business?

a.

Only life insurers in India

b.

Only non-life insurers in India

c.

Both life and non-life insurers in India

d.

Only overseas insurers

Discuss
Answer: (c).Both life and non-life insurers in India Explanation:As per IRDA Regulations, all life and non-life insurers in India can write inward reinsurance business from other domestic insurers and from overseas.
Q65.
Who writes inward reinsurance?

a.

Professional reinsurers

b.

Direct writing companies

c.

Both professional reinsurers and direct writing companies

d.

None of the above

Discuss
Answer: (c).Both professional reinsurers and direct writing companies Explanation:Inward reinsurance is written by both professional reinsurers and direct writing companies.
Q66.
Why is retrocession an essential tool in the risk management process of reinsurers?

a.

To reduce their exposure to risk

b.

To increase their profits

c.

To improve their financial stability

d.

To all of the above

Discuss
Answer: (a).To reduce their exposure to risk Explanation:Retrocession is a way for reinsurers to reduce their exposure to risk. By reinsuring part of their risk to another reinsurer, they can spread the risk out and reduce their potential losses.
Q67.
What is the purpose of a management information system in the context of inward reinsurance?

a.

To track the performance of each acceptance and the inward portfolio as a whole

b.

To generate reports for regulators

c.

To automate the underwriting process

d.

To all of the above

Discuss
Answer: (a).To track the performance of each acceptance and the inward portfolio as a whole Explanation:A management information system is used to track the performance of each acceptance and the inward portfolio as a whole. This information can be used to identify areas where there are problems and to make necessary adjustments to the inward reinsurance program.
Q68.
Why does the absence of retrocessional support exert significant influence on the rate quoted by lead underwriter as the primary reinsurer?

a.

Because the lead underwriter is taking on more risk

b.

Because the lead underwriter is not able to spread the risk out

c.

Because the lead underwriter is not able to make as much profit

d.

Both a and b

Discuss
Answer: (d).Both a and b Explanation:The absence of retrocessional support means that the lead underwriter is taking on more risk. This is because they are not able to spread the risk out to other reinsurers. As a result, they are not able to make as much profit and they are more likely to quote a higher rate.
Q69.
Why is reciprocal reinsurance trading considered important by ceding insurers?

a.

Because it allows them to reduce their exposure to risk

b.

Because it allows them to increase their profits

c.

Because it allows them to improve their financial stability

d.

Both a and b

Discuss
Answer: (d).Both a and b Explanation:Reciprocal reinsurance trading allows ceding insurers to reduce their exposure to risk and to increase their profits. By trading business with other insurers, they are able to spread the risk out and to reduce the potential losses.
Q70.
Which lines of business are most prevalent in reciprocal reinsurance trading?

a.

Fire and hull

b.

Motor

c.

Property

d.

All of the above

Discuss
Answer: (a).Fire and hull Explanation:Reciprocal reinsurance trading is most prevalent in fire and hull lines of business. This is because these lines of business are relatively predictable and there is a lot of data available to assess the risk.
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