Reinsurance

Question 1

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

Answer 1

Underwriting insurer and a professional reinsurance company

Question 2

4 types of Reinsurance are:

Answer 2

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

Question 3

Are Reinsurers required to be licensed to operate in Canada?

Answer 3

no

Question 4

Reinsurance can be said to be the _______ of insurance companies

Answer 4

insurance

Question 5

5 Reasons to Reinsure:

Answer 5

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

Question 6

_______ ________ - 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

Answer 6

Treaty Reinsurance

Question 7

When a company reinsures its liability with another it _____ business

Answer 7

Cedes

Question 8

the amount ceded is called _______

Answer 8

Cession

Question 9

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

Answer 9

Retention

Question 10

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

Answer 10

Retrocession

Question 11

The second reinsurer is a _______________

Answer 11

Retrocessionaire

Question 12

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

Answer 12

Facultative

Question 13

___________ ____________ - 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

Answer 13

Proportional Reinsurance

Question 14

________________________ - 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

Answer 14

non - proportional Reinsurance

Question 15

The reinsurer _________ business only with insurance companies

Answer 15

Transacts