GK
INSURANCE AWARENESS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Contract under which the ultimate liability of the reinsurer is capped and on which anticipated investment income is expressly acknowledged as an underwriting component is called ____
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Fire Insurance
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Escrow Account
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Earned Premium
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Finite Risk Reinsurance
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Explanation:
Detailed explanation-1: -Issue: Reinsurance, often referred to as “insurance for insurance companies, ‘’ is a contract between a reinsurer and an insurer. In this contract, the insurance company-the cedent-transfers risk to the reinsurance company, and the latter assumes all or part of one or more insurance policies issued by the cedent.
Detailed explanation-2: -The Reinsurer shall pay to the Company, with respect to each Risk of the Company, the amount of Net Loss sustained by the Company in excess of the Company Retention but not exceeding the Limits of Liability of the Reinsurer as set forth in the Schedule of Reinsurance.
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