C3 - C Flashcards
What is the primary goal of constructing a reinsurance programme?
To provide neither too little nor too much reinsurance at the right price with reliable reinsurers
What should an insurer first consider when constructing a reinsurance programme?
Whether any individual risks are unusual enough not to fit into proportional or non-proportional treaty contracts
What type of reinsurance is suggested for individual risks that do not fit standard contracts?
Fac reinsurance
In what order should an insurer typically consider reinsurance contracts?
Proportional contracts first, followed by non-proportional (XL) contracts
What is one option for XL protection an insurer could consider?
XL protection for all marine classes or all non-marine classes
What does XL protection for the whole account entail?
Covering every risk that the insurer writes
What is catastrophe XL protection?
XL protection that covers the whole account for catastrophic events
Is it mandatory for an insurer to follow the steps of points 1-3 when constructing a reinsurance programme?
No, an insurer can start with XL protection for the whole account
Why do reinsurers need to know about other reinsurance arrangements?
To understand whether they are the first port of call in any loss or if they will cover the balance of claims
What is the fundamental rule regarding reinsurance contracts and loss responses?
The most specific (or relevant) reinsurance contract responds first to any loss
What do government-based reinsurance programmes typically focus on?
Providing terrorism-related reinsurance cover for the commercial insurance market
What event triggered the establishment of government-based reinsurance programmes for terrorism?
The City of London bombings in 1992 and 1993 and the World Trade Center attacks in 1993 and 2001
What is the US Government’s scheme for terrorism insurance called?
TRIA (Terrorism Risk Insurance Act)
What was the purpose of renewing TRIA under TRIPRA in 2015?
To continue providing a scheme for claims related to terrorism losses
What is the Flood Re scheme in the UK?
A scheme that allows insurers to pass flood risk to the government as reinsurer
What must every insurer in the UK offering home insurance do regarding the Flood Re scheme?
Pay into the Flood Re scheme
Fill in the blank: The original acronym of the Terrorism Risk Insurance Act is _______.
TRIA
True or False: Similar government-backed reinsurance systems exist in countries like the UK, France, and Australia.
True
