Reinsurance Flashcards

1
Q

Reinsurance is and arrangement between the ____________ _______ and a ____________ ___________ _________

A

Underwriting insurer and a professional reinsurance company

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2
Q

4 types of Reinsurance are:

A
  1. Proportional
  2. Non - Proportional
  3. Treaty Reinsurance
  4. Facultative Reinsurance
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3
Q

Are Reinsurers required to be licensed to operate in Canada?

A

no

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4
Q

Reinsurance can be said to be the _______ of insurance companies

A

insurance

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5
Q

5 Reasons to Reinsure:

A
  1. To increase the insurer’s capacity to write business
  2. To maintain a proper reserve liability balance
  3. to reduce the effects of a catastrophic loss
  4. to provide stability in a fluctuating market
  5. to enable an ins’er to cease operation; in this case the outstanding portfolio would be transferred to another Insurance company
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6
Q

_______ ________ - an agreement between the insurer and the reinsurer which provides for automatic reinsurance without the ins’er having to submit each and every risk to the re-ins’er. This is a contract arranged on a yearly basis

A

Treaty Reinsurance

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7
Q

When a company reinsures its liability with another it _____ business

A

Cedes

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8
Q

the amount ceded is called _______

A

Cession

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9
Q

Then amount an insurer keeps for its own account is called _________

A

Retention

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10
Q

When a reinsurer cedes part of its business to another reinsurer that is called ____________

A

Retrocession

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11
Q

The second reinsurer is a _______________

A

Retrocessionaire

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12
Q

___________ - the insurer will offer a risk to the Reinsurer on an individual basis

A

Facultative

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13
Q

___________ ____________ - a percentage of the risk is transferred to the reinsurer and receives the same percentage of the original premium and is responsible for the same percentage of loss

A

Proportional Reinsurance

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14
Q

________________________ - the insurer pays all the loss up to an agreed amount called the priority, the reinsurer then pays all or part of the loss which exceeds the priority up to a limit previously agreed by the two parties

A

non - proportional Reinsurance

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15
Q

The reinsurer _________ business only with insurance companies

A

Transacts

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