Processing Information for Reinsurance Decisions MCQs

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

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Processing Information for Reinsurance Decisions MCQs | Page 1 of 7

Discover more Topics under IC85 Reinsurance Management

Q1.
What is the purpose of submitting statistics relating to reinsurance transactions to the regulatory authority?

a.

To calculate the reinsurance premium payable to reinsurers

b.

To make outstanding claims provisions for reinsurance arrangements

c.

To monitor the performance of each reinsurance arrangement

d.

To ensure accurate accounting of reinsurance transactions

Discuss
Answer: (c).To monitor the performance of each reinsurance arrangement Explanation:Submitting statistics relating to reinsurance transactions to the regulatory authority allows for the monitoring of the performance of each reinsurance arrangement. It helps in assessing the effectiveness and profitability of the reinsurance business and enables remedial action to be taken when necessary.
Q2.
Which data is needed to apply treaty limits and excess retentions?

a.

Direct premium data

b.

Data for individual losses

c.

Codes generated for catastrophe losses

d.

Codes for identifying occurrences under casualty 'clash' coverage

Discuss
Answer: (b).Data for individual losses Explanation:Data for individual losses is needed to apply treaty limits and excess retentions. This data helps in determining the amount of risk retained by the primary insurer and the portion that is ceded to the reinsurer.
Q3.
How does an accurate and efficient information system benefit the primary insurer in reinsurance business?What is the purpose of maintaining accurate statistics in reinsurance business?

a.

It increases credibility of the primary insurerTo determine the portion of policy/ies ceded to each surplus share reinsurer

b.

It helps in calculating reinsurance premiumsTo identify risks included in the treaty but not ceded for preserving profitability

c.

It ensures timely availability of outstanding claims provisionsTo exclude risks underwritten by the primary insurer from the reinsurance bordereau

d.

It facilitates inspection of books of account by reinsurersTo periodically monitor the performance of each reinsurance arrangement

Discuss
Answer: (b).It increases credibility of the primary insurerTo periodically monitor the performance of each reinsurance arrangement Explanation:An accurate and efficient information system helps in increasing the credibility of the primary insurer. It provides reliable data and information, which enhances the trust and confidence of reinsurers. This, in turn, improves the chances of successful treaty renewals.Maintaining accurate statistics in reinsurance business allows for the periodic monitoring of the performance of each reinsurance arrangement. It helps in evaluating the effectiveness and profitability of the arrangements and enables remedial action to be taken if needed.
Q4.
How does an accurate and efficient information system benefit the primary insurer in reinsurance business?

a.

It increases credibility of the primary insurer

b.

It helps in calculating reinsurance premiums

c.

It ensures timely availability of outstanding claims provisions

d.

It facilitates inspection of books of account by reinsurers

Discuss
Answer: (a).It increases credibility of the primary insurer Explanation:An accurate and efficient information system helps in increasing the credibility of the primary insurer. It provides reliable data and information, which enhances the trust and confidence of reinsurers. This, in turn, improves the chances of successful treaty renewals.
Q5.
What information must the primary insurer make available for inspection by the reinsurer?

a.

Direct premium data

b.

Books of account

c.

Treaty limits and excess retentions

d.

Codes for catastrophe losses

Discuss
Answer: (b).Books of account Explanation:The primary insurer must make available its books of account for inspection by the reinsurer. This is important for ensuring transparency and providing the reinsurer with access to relevant financial information related to reinsurance transactions.
Q6.
What types of reinsurance statistics are required for effective control?

a.

Treaty wise quarterly statistics

b.

Insurer wise statistics

c.

Class of business statistics

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Effective control in reinsurance requires various types of statistics, including treaty wise quarterly statistics, insurer wise statistics, and class of business statistics. These statistics provide valuable insights and allow for proper monitoring and evaluation of reinsurance activities.
Q7.
When should a major review of acceptances in a treaty be conducted?

a.

Every month

b.

Every quarter

c.

At least once a year

d.

As per the notice period

Discuss
Answer: (c).At least once a year Explanation:A major review of acceptances in a treaty should be conducted at least once a year. This review is an important part of the duties of executives in charge of underwriting and administration. It helps ensure the accuracy and effectiveness of the treaty and allows for necessary adjustments or actions to be taken.
Q8.
What is the purpose of gathering and analyzing reinsurance statistics?

a.

To assess cash flows

b.

To determine profit commissions

c.

To review outstanding loss provisions

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Gathering and analyzing reinsurance statistics serves multiple purposes. It allows for the assessment of cash flows, helps determine profit commissions, and facilitates the review of outstanding loss provisions. These activities contribute to effective underwriting and management of reinsurance treaties.
Q9.
What should be reviewed in relation to the accounted premium of a treaty?

a.

Consistency with estimated premium

b.

Release of reserves and portfolio movements

c.

Prompt rendering of accounts and settlement of balances

d.

Receipt of treaty document

Discuss
Answer: (a).Consistency with estimated premium Explanation:During the review of a treaty, one important aspect to consider is the consistency between the accounted premium and the estimated premium. Any sudden increase or decrease in premium should be carefully examined and discussed with the insurer or reinsurer involved.
Q10.
Which individuals are responsible for conducting reviews of reinsurance treaties?

a.

Executives in charge of underwriting and administration

b.

Statisticians and data analysts

c.

Brokers and intermediaries

d.

Regulators and regulatory authorities

Discuss
Answer: (a).Executives in charge of underwriting and administration Explanation:Executives in charge of underwriting and administration are responsible for conducting reviews of reinsurance treaties. They have the knowledge and expertise to assess the performance and adherence to treaty provisions, ensuring the effective management of reinsurance activities.
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