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 4 of 7

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Q31.
Why do ceding insurers and reinsurers need periodical statistics of their business?

a.

To monitor the performance of individual treaties

b.

To review past trends for reinsurance business renewal

c.

To reconcile statistics with reinsurance accounts

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Ceding insurers and reinsurers need periodical statistics of their business for various reasons. They use statistics to monitor the performance of individual treaties, review past trends for reinsurance business renewal, and reconcile statistics with reinsurance accounts. These statistics provide valuable insights and data for decision making and strategic planning.
Q32.
What is the purpose of establishing a decision support system in reinsurance?

a.

To gather and analyze data efficiently

b.

To monitor the performance of individual treaties

c.

To assess claims trends and provisions

d.

To satisfy the information needs of various categories of employees

Discuss
Answer: (a).To gather and analyze data efficiently Explanation:The purpose of establishing a decision support system in reinsurance is to gather and analyze data efficiently. It helps in collecting relevant information for monitoring the performance of individual treaties, assessing claims trends and provisions, and satisfying the information needs of various categories of employees. A well-designed decision support system enables effective decision making based on accurate and timely data.
Q33.
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.
Q34.
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.
Q35.
What are some of the uses of the information produced from a statistical base in insurance and reinsurance?

a.

Production of accounts

b.

Production of marketing information

c.

Assessment of outstanding claims and IBNR reserves

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The information produced from a statistical base in insurance and reinsurance has multiple uses. It is used for the production of accounts, marketing information, and rating information. It is also utilized for assessing outstanding claims and Incurred But Not Reported (IBNR) reserves, as well as for financial planning purposes. These uses demonstrate the importance of a robust statistical system in supporting various aspects of insurance and reinsurance operations.
Q36.
What is the purpose of reconciling balances and reviewing cash flow in the context of evolving a statistical system?

a.

To assess profitability of outgoing treaties

b.

To analyze the portfolio underwritten and ascertain exposures

c.

To determine the aggregate loss amount due to a catastrophic event

d.

To obtain marketing information for outgoing treaties

Discuss
Answer: (b).To analyze the portfolio underwritten and ascertain exposures Explanation:Reconciling balances and reviewing cash flow in the context of evolving a statistical system serves the purpose of option b. It helps in analyzing the portfolio underwritten and ascertaining the exposures associated with the business. This step provides valuable insights into the financial performance and risks of the reinsurance operations.
Q37.
What type of information is required for retrocession treaties in the context of evolving a statistical system?

a.

Statistical and accounting requirements

b.

Large claims information

c.

Marketing information for outgoing treaties

d.

Aggregate loss amount due to a catastrophic event

Discuss
Answer: (a).Statistical and accounting requirements Explanation:Retrocession treaties in the context of evolving a statistical system require statistical and accounting requirements, as indicated by option a). Retrocession involves transferring a portion of the reinsurance risk to another reinsurer, and thus, specific statistical and accounting information is necessary to manage and analyze these treaty arrangements.
Q38.
In the case of _________________, all business exchanged with the insurer or reinsurer is summarised in a sheet, showing cessions on one side and matching acceptances on the other side.

a.

Reinsurance arrangement

b.

Reciprocal exchange

c.

Retrocession arrangement

d.

Cancellation of reinsurance agreement

Discuss
Answer: (b).Reciprocal exchange Explanation:In the case of a reciprocal exchange, all business exchanged with the insurer or reinsurer is summarized in a sheet. This means that both cessions (risks transferred to the reinsurer) and matching acceptances (risks accepted by the reinsurer) are recorded on the sheet. A reciprocal exchange refers to a reinsurance arrangement where two parties agree to exchange risks with each other. They both act as both a reinsurer and a ceding insurer, depending on the specific risks involved. This arrangement allows for a balanced and mutually beneficial exchange of risks between the parties involved.
Q39.
With the wider use of computers and telecommunications, there is a growing preference for simplified administration procedures in the reinsurance industry. This has led to:

a.

Increased paperwork for reinsurers and brokers

b.

Decreased administrative effort for insurers

c.

Higher reinsurance costs for insurers

d.

Slower communication between insurers and reinsurers

Discuss
Answer: (b).Decreased administrative effort for insurers Explanation:The use of computers and telecommunications allows insurers to produce reinsurance accounts themselves, resulting in a minimum cost and saving administrative effort for reinsurers and brokers.
Q40.
Electronic data processing (EDP) techniques in reinsurance have gained acceptance:

a.

Only in a few countries

b.

Only in the first generation environment

c.

Only in offices with on-line systems

d.

All over the world

Discuss
Answer: (d).All over the world Explanation:The application of electronic data processing methods in reinsurance business is advanced and gained acceptance in countries all over the world.
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