GK
INSURANCE AWARENESS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The portion of risk that a reinsurance company cedes or amount of insurance the company chooses not to retain is called ____
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Retro cession
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Retrospective Rating
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Universal Life Insurance
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Unauthorized Reinsurance
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Explanation:
Detailed explanation-1: -Definition: Reinsurance risk refers to the inability of the ceding company or the primary insurer to obtain insurance from a reinsurer at the right time and at an appropriate cost. The inability may emanate from a variety of reasons like unfavourable market conditions, etc.
Detailed explanation-2: -This type of reinsurance is called facultative because the reinsurer has the power or “faculty” to accept or reject all or a part of any policy offered to it in contrast to treaty reinsurance, under which it must accept all applicable policies once the agreement is signed.
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