Retentions MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Retentions, 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 Retentions 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 Retentions mcq questions that explore various aspects of Retentions problems. Each MCQ is crafted to challenge your understanding of Retentions 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 Retentions 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 Retentions. 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 Retentions knowledge to the test? Let's get started with our carefully curated MCQs!

Retentions MCQs | Page 18 of 24

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Q171.
What is the difference between an All Risks package and traditional separate insurances?

a.

An All Risks package covers multiple types of exposures on a seamless basis, while traditional separate insurances cover each exposure separately.

b.

An All Risks package only covers one type of exposure, while traditional separate insurances cover multiple types of exposures.

c.

An All Risks package is more expensive than traditional separate insurances.

d.

An All Risks package is only available through a quota-share or surplus reinsurance.

Discuss
Answer: (a).An All Risks package covers multiple types of exposures on a seamless basis, while traditional separate insurances cover each exposure separately. Explanation:An All Risks package covers multiple types of exposures on a seamless basis, while traditional separate insurances cover each exposure separately.
Q172.
Why can't department-wise reinsurance arrangements of the insurer be utilized for All Risks packages?

a.

There may be situations where some losses would not be covered under traditional separate insurances but are covered under the package.

b.

All Risks packages are more expensive than traditional separate insurances.

c.

All Risks packages are only available through a quota-share or surplus reinsurance.

d.

All Risks packages offer the same coverage as traditional separate insurances.

Discuss
Answer: (a).There may be situations where some losses would not be covered under traditional separate insurances but are covered under the package. Explanation:An "All Risks" package offers cover on a seamless basis, and there may be situations of some losses which would not be covered under traditional separate insurances but are covered under the package.
Q173.
What type of reinsurance support is needed for an All Risks package?

a.

Full facultative reinsurance support

b.

Quota-share or surplus reinsurance support

c.

Excess of loss cover

d.

Either a or c

Discuss
Answer: (d).Either a or c Explanation:An All Risks package is not the matter of interest for the quota-share and surplus reinsurance, but will be fully driven by facultative reinsurance considerations. The insurer has to select a combination of facultative and excess of loss covers while ensuring that his net retention is not unduly overburdened.
Q174.
Who controls the terms, conditions, and all aspects of an All Risks package?

a.

The insurer

b.

The reinsurer

c.

The policyholder

d.

The underwriter

Discuss
Answer: (b).The reinsurer Explanation:The terms, conditions, and all aspects of an All Risks package are controlled by the reinsurers.
Q175.
Why are markets for All Risks packages with enough capacity limited in number?

a.

All Risks packages are very competitively priced and decrease the premium base.

b.

All Risks packages cover multiple types of exposures on a seamless basis, which can lead to a combination of various exposures.

c.

All Risks packages are more expensive than traditional separate insurances.

d.

All Risks packages are only available through a quota-share or surplus reinsurance.

Discuss
Answer: (b).All Risks packages cover multiple types of exposures on a seamless basis, which can lead to a combination of various exposures. Explanation:The markets for such covers with enough capacity are limited in number and at times full proportional facultative reinsurance support may not be available because of the volume of business under one policy, which is a combination of various exposures.
Q176.
What types of risks are covered by the accident/liability reinsurance?

a.

Motor

b.

Personal accident

c.

Burglary

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The range of risks covered by accident/liability reinsurance includes motor, personal accident, burglary, jewelers` block, non-traditional insurances, and a range of liability insurances covering risk of legal exposures to third parties and public.
Q177.
What is the most common form of reinsurance used for accident/liability reinsurance?

a.

Quota-share

b.

Surplus reinsurance

c.

Facultative reinsurance

d.

Proportional reinsurance

Discuss
Answer: (a).Quota-share Explanation:The most common form of reinsurance used for accident/liability reinsurance is the quota-share in conjunction with a working excess of loss.
Q178.
How is motor insurance typically reinsured in India?

a.

Quota-share

b.

Surplus reinsurance

c.

Facultative reinsurance

d.

Working excess of loss

Discuss
Answer: (d).Working excess of loss Explanation:In India, all motor insurances have been reinsured on a working excess of loss basis.
Q179.
How are high value vehicles typically insured in accident/liability reinsurance?

a.

Quota-share

b.

Surplus reinsurance

c.

Facultative reinsurance

d.

Excess of loss

Discuss
Answer: (a).Quota-share Explanation:High value vehicles are insured on a quota-share basis to spread the risk of private cars and commercial vehicles with high values.
Q180.
How are personal accident risks typically addressed in accident/liability reinsurance?

a.

Quota-share

b.

Surplus reinsurance

c.

Catastrophe excess of loss

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Personal accident risks require reinsurance for high net worth individuals and for accumulation as in a single aircraft. These are addressed through a combination of working and catastrophe excess of loss reinsurances.
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