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 22 of 24

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Q211.
What is the key element in assessing the true value of assets recoverable from a reinsurer?

a.

The reinsurer's reputation

b.

The direct insurer's total portfolio

c.

The amount of business the life insurer underwrites

d.

The life insurer's reliance on reinsurance

Discuss
Answer: (c).The amount of business the life insurer underwrites Explanation:A key element in assessing the true value of assets recoverable from a reinsurer is the amount of insurance business the life insurer underwrites.
Q212.
What is the life insurance reserve?

a.

The reserve a life insurer has to meet his short-term liabilities

b.

The reserve a life insurer has to meet his long-term liabilities

c.

The reserve a life insurer has to meet his daily expenses

d.

The reserve a life insurer has to meet his overhead costs

Discuss
Answer: (b).The reserve a life insurer has to meet his long-term liabilities Explanation:The life insurance reserve is an actuarially calculated reserve designed to ensure that the insurer has sufficient reserves to meet his long-term liabilities.
Q213.
What has been the trend in life insurance expansion over the last 20 years?

a.

Exceeding economic growth in industrialised countries by 5%

b.

Exceeding economic growth in emerging markets by 9%

c.

Exceeding economic growth in industrialised countries and emerging markets by 5%

d.

None of the above

Discuss
Answer: (b).Exceeding economic growth in emerging markets by 9% Explanation:Life insurance has been expanding by 5% in industrialised countries and 9% in emerging markets over the last 20 years.
Q214.
What is the role of a reinsurer in life insurance?

a.

Providing expertise in understanding mortality and morbidity in determination of rates and reinsurance.

b.

Respecting the life insurer's need not to have too great a reliance on reinsurance.

c.

Assessing the true value of assets recoverable from a reinsurer.

d.

All of the above.

Discuss
Answer: (d).All of the above. Explanation:Reinsurers share their knowledge of market experience with the reassured, provide expertise in understanding mortality and morbidity in determination of rates and reinsurance, and respect the life insurer's need not to have too great a reliance on reinsurance. Assessing the true value of assets recoverable from a reinsurer is a key element of life insurance.
Q215.
What is the life insurance reserve?

a.

The amount of insurance business the life insurer underwrites

b.

An actuarially calculated reserve designed to ensure that the insurer has sufficient reserves to meet its long-term liabilities

c.

The extent to which the life insurer is reinsuring its life business

d.

Both b and c

Discuss
Answer: (d).Both b and c Explanation:The life insurance reserve is an actuarially calculated reserve designed to ensure that the insurer has sufficient reserves to meet its long-term liabilities. The life insurance reserve reflects the amount of insurance business the life insurer underwrites and the extent to which it is reinsuring its life business.
Q216.
What is a key risk faced by a direct insurer that relies too heavily on one reinsurer?

a.

Reduced profits

b.

Increased competition

c.

Substantial risk of default

d.

Difficulty in finding new business

Discuss
Answer: (c).Substantial risk of default Explanation:A direct insurer that relies too heavily on one reinsurer faces a substantial risk of default.
Q217.
What are some peculiarities in reinsuring a life insurance policy?

a.

Whether reinsurance is per life or policy

b.

Whether the reinsurer pays a monthly benefit or a lump sum benefit

c.

Whether the reinsurer follows accelerated death benefits

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:There are several peculiarities in reinsuring a life insurance policy, including whether reinsurance is per life or policy, whether the reinsurer pays a monthly benefit or a lump sum benefit, and whether the reinsurer follows accelerated death benefits. The life insurer may be on risk for a life reinsured on a facultative basis and that the reinsurer may need to approve the resumption of cover following the termination of a policy.
Q218.
What is keyman insurance?

a.

Insurance to protect business debts of a firm

b.

Insurance to protect individuals' health

c.

Insurance to protect cars owned by a firm

d.

Insurance to protect against natural disasters

Discuss
Answer: (a).Insurance to protect business debts of a firm Explanation:Keyman insurance protects business debts of a firm which is dependant on a key individual for continuing its business.
Q219.
What is the sum insured related to in keyman insurance?

a.

The value of a person

b.

The value of his loss to his firm

c.

The value of the firm's total assets

d.

The value of his personal belongings

Discuss
Answer: (b).The value of his loss to his firm Explanation:The sum insured would not be related to the value of a person but the value of his loss to his firm.
Q220.
Who pays the premium for keyman insurance?

a.

The key individual

b.

The employees of the firm

c.

The firm as a business expense

d.

The government

Discuss
Answer: (c).The firm as a business expense Explanation:The premium is paid by the firm as a business expense.
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