Reinsurance Flashcards
Reinsurance is and arrangement between the ____________ _______ and a ____________ ___________ _________
Underwriting insurer and a professional reinsurance company
4 types of Reinsurance are:
- Proportional
- Non - Proportional
- Treaty Reinsurance
- Facultative Reinsurance
Are Reinsurers required to be licensed to operate in Canada?
no
Reinsurance can be said to be the _______ of insurance companies
insurance
5 Reasons to Reinsure:
- To increase the insurer’s capacity to write business
- To maintain a proper reserve liability balance
- to reduce the effects of a catastrophic loss
- to provide stability in a fluctuating market
- to enable an ins’er to cease operation; in this case the outstanding portfolio would be transferred to another Insurance company
_______ ________ - 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
Treaty Reinsurance
When a company reinsures its liability with another it _____ business
Cedes
the amount ceded is called _______
Cession
Then amount an insurer keeps for its own account is called _________
Retention
When a reinsurer cedes part of its business to another reinsurer that is called ____________
Retrocession
The second reinsurer is a _______________
Retrocessionaire
___________ - the insurer will offer a risk to the Reinsurer on an individual basis
Facultative
___________ ____________ - 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
Proportional Reinsurance
________________________ - 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
non - proportional Reinsurance
The reinsurer _________ business only with insurance companies
Transacts