Reinsurance Distributing the Programme Arrangements MCQs

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

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Reinsurance Distributing the Programme Arrangements. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Reinsurance Distributing the Programme Arrangements knowledge to the test? Let's get started with our carefully curated MCQs!

Reinsurance Distributing the Programme Arrangements MCQs | Page 7 of 10

Discover more Topics under IC85 Reinsurance Management

Q61.
What does the intermediary's brokerage cover?

a.

Services to the insurer

b.

Services to the reinsurer

c.

Services to both the insurer and reinsurer

d.

Financial position monitoring of the reinsurer

Discuss
Answer: (c).Services to both the insurer and reinsurer Explanation:The intermediary receives brokerage from the reinsurer for their services to both the insurer and the reinsurer. The intermediary's role involves representing the insurer to the reinsurer and handling documentation for the reinsurer. Therefore, option c is the correct answer.
Q62.
What is one benefit of using an intermediary in reinsurance placement?

a.

Access to insurers in distant markets

b.

Regular flow of intelligence about world markets

c.

Direct operation without intermediaries

d.

Close supervision of the insurer's executives

Discuss
Answer: (b).Regular flow of intelligence about world markets Explanation:One value provided by the intermediary is a regular flow of intelligence about world markets. The intermediary keeps a watch over the financial position of reinsurers and provides alerts for downgrades in their financial standing. This indicates their role in gathering market information and sharing it with the insurer. Therefore, option b is the correct answer.
Q63.
What distinguishes an intermediary from a professional reinsurer?

a.

Ability to handle tough negotiations without embarrassment

b.

Provision of depth of service on difficult reinsurance business

c.

Ability to establish connections with insurers in distant parts of the world

d.

Close relationship with the reinsurer's representative

Discuss
Answer: (b).Provision of depth of service on difficult reinsurance business Explanation:An intermediary, like a professional reinsurer, is capable of providing depth of service on more difficult reinsurance business. This suggests that intermediaries possess expertise and experience to handle complex reinsurance transactions effectively. Therefore, option b is the correct answer.
Q64.
Who is responsible for preparing the slip in reinsurance placement?

a.

The intermediary

b.

The broker

c.

The lead underwriters

d.

The reinsurers

Discuss
Answer: (b).The broker Explanation:The slip is prepared in consultation with the broker, who serves as the intermediary. The broker goes around to reinsurers' offices worldwide, informing them about the risk and seeking cover support. Therefore, option b is the correct answer.
Q65.
What distinguishes lead underwriters in reinsurance placement?

a.

They have extensive knowledge of worldwide markets.

b.

They are the only ones who can quote on the slip.

c.

They work closely with the intermediary in negotiations.

d.

They have the largest share of acceptance for the risk.

Discuss
Answer: (d).They have the largest share of acceptance for the risk. Explanation:Lead underwriters are the ones who indicate their quote and their share of acceptance of the risk. They play a significant role in the placement process and are respected in the market for their acumen to quote. Therefore, option d is the correct answer.
Q66.
What is the role of the intermediary in reinsurance placement?

a.

To negotiate with the lead underwriters on behalf of the broker

b.

To collect premium and distribute it to the underwriters

c.

To issue policy documentation after the cover note is issued

d.

To establish connections with reinsurers from various regions

Discuss
Answer: (b).To collect premium and distribute it to the underwriters Explanation:The intermediary takes responsibility for collecting premium and distributing it to the underwriters. This implies that the intermediary plays a crucial role in financial transactions between the insurer and the underwriters. Therefore, option b is the correct answer.
Q67.
What does the cover note in reinsurance placement summarize?

a.

The terms of placement, premium, and participating underwriters

b.

The broker's consultation with the reinsurers worldwide

c.

The conditionalities on the slip negotiated by the intermediary

d.

The total written line of the intermediary's share of risk placement

Discuss
Answer: (a).The terms of placement, premium, and participating underwriters Explanation:The cover note issued by the intermediary summarizes the terms of placement, premium, and the participating underwriters with their respective shares. It serves as a summary document for the reinsurance placement. Therefore, option a is the correct answer.
Q68.
Why is it unwise to place too large a share of the treaty with a reinsurer?

a.

It may result in administrative inconvenience.

b.

Reinsurers prefer smaller shares for ease of handling.

c.

It limits the participation of other reinsurers in the treaty.

d.

It decreases the financial stability of the reinsurer.

Discuss
Answer: (a).It may result in administrative inconvenience. Explanation:Placing too large a share of the treaty with a reinsurer can be administratively inconvenient. Therefore, option a is the correct answer.
Q69.
What is the importance of continuity in relationships with reinsurers?

a.

It ensures promptness and reasonableness from reinsurers.

b.

It helps in attaining the objectives of reciprocal reinsurance exchanges.

c.

It allows for detailed investigation of original business rate levels.

d.

It improves the underwriting data and risk improvements.

Discuss
Answer: (b).It helps in attaining the objectives of reciprocal reinsurance exchanges. Explanation:Continuity of relationship with reinsurers is very important and that well-established intermediaries provide high value addition in this respect. The relationship with reinsurers is the basis for attaining the objectives of reciprocal reinsurance exchanges. Therefore, option b is the correct answer.
Q70.
What type of reinsurance examination is typically conducted for higher surpluses and facultative reinsurance?

a.

Investigation of original business rate levels

b.

Detailed inspection of the risks by intermediaries

c.

Analysis of underwriting data and rate adequacy

d.

Examination of the financial soundness of the reinsurer

Discuss
Answer: (c).Analysis of underwriting data and rate adequacy Explanation:When placing higher surpluses and facultative reinsurance, reinsurers ask for detailed underwriting data and examine the adequacy of rate levels. This suggests that the analysis of underwriting data and rate adequacy is conducted in such cases. Therefore, option c is the correct answer.
Page 7 of 10