WorksheetsNATURE AND PURPOSE OF REINSURANCE
Total questions: 10
Worksheet time: 8mins
Select THREE (3) true statement regarding reinsurance contract
Reinsurance is an insurance for a insurance company
It served as alternative to spread risk widely
The act of transferring cedent liability to another insurer in consideration for payment of reinsurance premium
Reinsurance is the maximum amount of risk retained by an insurer per risk.
Determine the following statement TRUE of FALSE:
"The spreading of risk process is called "placement of reinsurance”
TRUE
FALSE
Choose TWO (2) correct comparison of insurance VS reinsurance
Reinsurance contracts are between reinsurance brokers and insurance brokers or insurance agent with insurers VS
Insurance contracts are with insured and insurer.
The subject matter of reinsurance is the contractual liabilities between insurer and reinsurer VS The subject matter of insurance is based on person legal liability
Reinsurance business can be transacted internationally around the globe VS Insurance essentially transacted on domestic basis.
Decide this statement TRUE or FALSE
"Reinsurance assist in stabilizing volatility of risk exposure be it comes from individual risk or accumulated risk"
TRUE
FALSE
Decide this statement TRUE or FALSE
"With reinsurance capacity the insurer will only able to write smaller and simple risk only."
TRUE
FALSE
Select TWO (2) TRUE statements
With reinsurance,insurer can underwrite greater number of policies.
As more policies are insured, insurer difficult to forecast the equitable cost for reinsurance.
Reinsurance help cedent to predict probability of loss.
Fill in the blanks
________ is the amount of risk arising from an insurance policy or policies that is retained by a ceding company after reinsuring the balance amount of the risk.
Risk transfer
Risk spreading
Reinsurance
Retention
Decide this statement TRUE or FALSE
"From Financing context, reinsurance help insurer to sustain solvency margin"
TRUE
FALSE
Fill in the blank:
__________ is when insurer spreads the risk of among multiple reinsurers.
Retention
Risk spreading
Risk transfer
Reinsurance
Which of the following is NOT the purpose of reinsurance
Risk transfer
Capacity
Stabilization of underwriting result
Mandatory cession by industry regulation
