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 7 of 7

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Q61.
What is the purpose of reviewing acceptances in reinsurance business?

a.

To ensure timely availability of acceptances.

b.

To assess historical exchange of results.

c.

To validate assumptions made during the acceptance process.

d.

To reconcile statistics with reinsurance accounts.

Discuss
Answer: (c).To validate assumptions made during the acceptance process. Explanation:The purpose of reviewing acceptances in reinsurance business is to validate assumptions made during the acceptance process. This review helps ensure that the initial decisions regarding risks, exposures, rates, and other factors were accurate and appropriate.
Q62.
What information is summarized in a reciprocal exchange in reinsurance?

a.

Cessions and acceptances

b.

Historical exchange of results

c.

Assumptions and exposures

d.

Renewal of treaties and statistics

Discuss
Answer: (a).Cessions and acceptances Explanation:A reciprocal exchange summarizes all the business exchanged with the insurer or reinsurer, showing cessions on one side and matching acceptances on the other side. This summary provides a clear overview of the reciprocal transactions between the parties.
Q63.
Why is careful control required for accumulation hazards in reinsurance business?

a.

To assess historical exchange of results

b.

To ensure timely availability of acceptances

c.

To validate assumptions made during the acceptance process

d.

To manage exposures due to catastrophic perils

Discuss
Answer: (d).To manage exposures due to catastrophic perils Explanation:Careful control is required for accumulation hazards in reinsurance business to manage exposures due to catastrophic perils such as earthquakes, storms, tornados, and others. These perils pose significant risks, and effective control measures are necessary to mitigate potential losses.
Q64.
What do ceding insurers and reinsurers need periodical statistics for?

a.

Decision making and review purposes

b.

Assessing historical exchange of results

c.

Validating assumptions in excess of loss reinsurance

d.

Reconciling statistics with reinsurance accounts

Discuss
Answer: (a).Decision making and review purposes Explanation:Both ceding insurers and reinsurers need periodical statistics of their business for decision-making and review purposes. These statistics provide valuable insights into the performance, trends, and outcomes of their reinsurance activities, enabling informed decision making and effective reviews.
Q65.
ABC ltd provides database access to their customers as an extension of the intranet to download and use certificates of insurance or to ascertain their own account balance status, etc. This access is known as ____________

a.

Internet

b.

Intranet

c.

Extranet

d.

World wide web

Discuss
Answer: (c).Extranet Explanation:In the given scenario, ABC Ltd provides database access to their customers as an extension of the intranet. This type of access, which allows external users (customers) to connect to the organization's internal network and access specific information or services, is referred to as an "extranet." It provides a controlled and restricted form of access to selected individuals or entities outside the organization.
Q66.
The basic statistics relating to a treaty are collated from _____________ as sent and received.

a.

Bank statements

b.

Financial statements

c.

Account statements

d.

Actuarial data

Discuss
Answer: (c).Account statements Explanation:The basic statistics relating to a treaty are collated from "account statements" as sent and received. Account statements contain financial information and transaction details related to the treaty. These statements provide the necessary data for assessing the performance and results of the treaty.
Q67.
While preparing summary sheet in the case of reciprocal exchange, which of the following information is not included?

a.

Adequacy of rate

b.

Commissions

c.

Incurred claims

d.

Net results

Discuss
Answer: (a).Adequacy of rate Explanation:In the case of reciprocal exchange, all the business exchanged with the insurer or reinsurer is summarized in a sheet, showing cessions on one side and matching acceptances on the other side. The purpose of this summary sheet is to present a concise overview of the business exchanged. While the summary sheet may include information such as commissions, incurred claims, and net results.
Q68.
The magnitude of an earthquake is measured on the ______________.

a.

Richter scale

b.

Beufort scale

c.

Moment magnitude scale

d.

Modified magnitude scale

Discuss
Answer: (a).Richter scale Explanation:The magnitude of an earthquake is measured on the Richter scale. The Richter scale is a logarithmic scale used to quantify the energy released by an earthquake. It measures the amplitude of seismic waves recorded by seismographs.
Q69.
Which of the following is an example of a ‘high risk’ area due to frequent occurrence of bush fires?

a.

The USA

b.

Europe

c.

Japan

d.

Australia

Discuss
Answer: (d).Australia Explanation:A 'high risk' area due to the frequent occurrence of bush fires is Australia. This means that Australia is more prone to bush fires compared to the other options. While bush fires can occur in other regions as well, Australia is particularly known for its susceptibility to such fires.
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