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 2 of 7

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Q11.
Which of the following factors can affect underlying statistical trends in reinsurance?

a.

Class of business

b.

Type of reinsurance contract

c.

Legislation of the country of origin

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Underlying statistical trends in reinsurance can be affected by various factors, including the class of business, type of reinsurance contract, and legislation of the country of origin. These factors influence the nature and characteristics of the reinsurance business and can impact statistical patterns and trends.
Q12.
Who are the users of the information produced from a statistical base in insurance and reinsurance organizations?

a.

Underwriting staff

b.

Accounting staff

c.

Marketing staff

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The information produced from a statistical base in insurance and reinsurance organizations is used by various categories of employees. This includes underwriting staff, accounting staff, marketing staff, claims staff, and management. Each of these groups has different needs and requirements for utilizing the statistical information in their respective roles.
Q13.
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.
Q14.
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.
Q15.
What factors should be considered when tendering a provisional notice of cancellation to the ceding insurer?

a.

Current trend of business

b.

Other business from the insurer

c.

Overall relationship

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:When considering the tendering of a provisional notice of cancellation to the ceding insurer, the underwriter should take into account the current trend of business, other business from the insurer, overall relationship, and any other special considerations. These factors help determine the appropriate course of action.
Q16.
How long is the typical monitoring period to assess the quality of a treaty?

a.

1 to 2 years

b.

2 to 3 years

c.

3 to 4 years

d.

4 to 5 years

Discuss
Answer: (c).3 to 4 years Explanation:The quality of a treaty is typically assessed over a period of 3 to 4 years. During this time, the underwriter closely monitors the results and performance of the treaty, allowing for a more comprehensive evaluation of its effectiveness and profitability.
Q17.
What information is summarized in a sheet for treaties with reciprocal exchange?

a.

Cessions and acceptances

b.

Premiums and commissions

c.

Incurred claims and net results

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:In treaties with reciprocal exchange, a summary sheet is prepared that shows cessions on one side and matching acceptances on the other side. This sheet includes information such as cessions, acceptances, premiums, commissions, incurred claims, and net results for each contract year. It provides an overview of the historical exchange of results and helps assess the impact of changes in the rate of exchange.
Q18.
What factors are considered when reviewing excess of loss reinsurance?

a.

Validity of assumptions

b.

GNPI (Gross Net Premium Income)

c.

Adequacy of rate

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:When reviewing excess of loss reinsurance, the underwriter pays due regard to factors such as the validity of assumptions made during acceptance, GNPI (Gross Net Premium Income), and the adequacy of the rate. These considerations ensure that the reinsurance terms align with the intended risk coverage and pricing.
Q19.
What actions should be taken when a provisional notice of cancellation is given by the ceding insurer?

a.

Conduct a review of the terms for the ensuring year

b.

Decide on continuation with the business

c.

Give a definite notice of cancellation

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:When a provisional notice of cancellation is given by the ceding insurer, several actions should be taken. These include conducting a review of the terms for the ensuring year, deciding on continuation with the business, and providing a definite notice of cancellation if necessary. Proper communication and coordination between the reinsurer and ceding insurer are crucial during this process.
Q20.
How do reinsurers estimate outstanding losses for acceptances?

a.

Estimated losses as advised by the ceding insurer

b.

Latest available date plus large losses intimated subsequently

c.

Provision for portfolio entry in the treaty

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Reinsurers estimate outstanding losses for acceptances using various methods. These include considering estimated losses as advised by the ceding insurer, incorporating the latest available date plus large losses intimated subsequently, and including a provision for portfolio entry in the treaty. These methods are employed to make reasonably accurate estimates of outstanding losses.
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