GK
INSURANCE AWARENESS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A standing agreement between insurers and re-insurers. Under a treaty each party automatically accepts specific percentages of the insurer’s business is termed as ____
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Treaty Reinsurance
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Facultative Reinsurance
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Catastrophe Reinsuranc
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Excess of Loss Reinsurance
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Explanation:
Detailed explanation-1: -Treaty reinsurance represents a contract between the ceding insurance company and the reinsurer who agrees to accept the risks of a predetermined class of policies over a period of time.
Detailed explanation-2: -Treaty reinsurance occurs whenever the ceding company agrees to cede all risks within a specific class of insurance policies to the reinsurance company.
Detailed explanation-3: -Treaty Reinsurance: A pre-negotiated agreement between the primary and the reinsurer. The primary insurer agrees to cede all risks within a defined class or classes to the reinsurer. In return, the reinsurer agrees to provide reinsurance on all risks ceded without individual underwriting.
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