Reinsurance Markets MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Reinsurance Markets, 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 Markets 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 Markets mcq questions that explore various aspects of Reinsurance Markets problems. Each MCQ is crafted to challenge your understanding of Reinsurance Markets 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 Markets 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 Markets. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

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Reinsurance Markets MCQs | Page 3 of 10

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Q21.
How do specialist reinsurers typically accept business from ceding companies?

a.

Through reciprocal agreements

b.

Through direct transactions

c.

Through reinsurance brokers

d.

Through retrocession arrangements

Discuss
Answer: (c).Through reinsurance brokers Explanation:Specialist reinsurers either transact business on a direct basis with ceding companies or accept business through brokers.
Q22.
What is the strategic approach of GIC Re in expanding its presence in the reinsurance market?

a.

Setting up representative offices in targeted countries

b.

Focusing on developing markets like Europe and the United States

c.

Acquiring established reinsurers in different regions

d.

Partnering with local insurance companies in emerging markets

Discuss
Answer: (a).Setting up representative offices in targeted countries Explanation:GIC Re is setting up representative offices in targeted countries, which will later become their actual offices once they meet all the local regulations.
Q23.
Which regions does GIC Re primarily target for inward overseas reinsurance premium?

a.

Europe and the United States

b.

Middle East, Soviet block, and Far East

c.

Asian and African regions

d.

Latin America and the Caribbean

Discuss
Answer: (b).Middle East, Soviet block, and Far East Explanation:GIC Re targets inward overseas reinsurance premium by creating a presence in the Middle East, the Soviet block, and Far East, as developed markets like Europe and the United States already have substantial presence of many large reinsurers.
Q24.
What is GIC Re's objective regarding the proportion of domestic to overseas inward reinsurance business?

a.

20:80

b.

30:70

c.

40:60

d.

50:50

Discuss
Answer: (d).50:50 Explanation:GIC Re targets a book of 50:50 in domestic to overseas inward reinsurance business.
Q25.
How does GIC Re handle the obligatory cessions received from non-life insurers in India?

a.

Retain 100% of the cessions for its own portfolio

b.

Retrocede 100% of the cessions to the ceding insurers

c.

Retrocede up to 10% of the cessions to the ceding insurers

d.

Retrocede at least 50% of the cessions to the ceding insurers

Discuss
Answer: (d).Retrocede at least 50% of the cessions to the ceding insurers Explanation:GIC Re receives up to 10% obligatory cessions from non-life insurers in India and retrocedes at least 50% of the obligatory cessions received to the ceding insurers.
Q26.
How do underwriting agencies in the London market operate?

a.

They write business exclusively for brokers

b.

They primarily serve clients in domestic insurance markets

c.

They participate in international reinsurance business on behalf of insurers

d.

They focus on direct underwriting for individual policyholders

Discuss
Answer: (c).They participate in international reinsurance business on behalf of insurers Explanation:Underwriting agencies write selected business for clients in the London market from their own and other brokers' books of business, participating in international reinsurance business.
Q27.
What is the primary reason for captive companies to broaden their sphere of activities?

a.

Financial diversification

b.

Access to specialized insurance products

c.

Tax advantages

d.

Global market expansion

Discuss
Answer: (c).Tax advantages Explanation:Captive companies often broaden their sphere of activities, including writing open market insurance or reinsurance business, for tax reasons.
Q28.
Where are the majority of captive insurers located?

a.

United States

b.

United Kingdom

c.

Bermuda

d.

Switzerland

Discuss
Answer: (c).Bermuda Explanation:Nearly 35% of captive insurers are located in Bermuda.
Q29.
Which of the following is not usually a location for captive insurers?

a.

Cayman Islands

b.

Singapore

c.

Switzerland

d.

Isle of Man

Discuss
Answer: (c).Switzerland Explanation:Cayman Islands, Singapore, Isle of Man, and other locations are for captive insurers.
Q30.
What role does the captive insurance business play in the reinsurance market?

a.

It primarily serves as a fronting market

b.

It provides reinsurance support to other insurers

c.

It specializes in retrocession arrangements

d.

It serves as a captive ceding market

Discuss
Answer: (d).It serves as a captive ceding market Explanation:Captive insurance business requires substantial fronting and reinsurance support, making it a major reinsurance ceding market.
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