MANAGEMENT

Detailed explanation-1: -Reinsurance is also known as insurance for insurers or stop-loss insurance. Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim.

Detailed explanation-2: -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-3: -Definition: When an insurance company enters into a reinsurance contract with another insurance company, then the same is called treaty reinsurance.

Detailed explanation-4: -Definition: It is a process whereby one entity (the reinsurer) takes on all or part of the risk covered under a policy issued by an insurance company in consideration of a premium payment. In other words, it is a form of an insurance cover for insurance companies.

Detailed explanation-5: -Reinsurance can be divided into two basic categories: treaty and facultative. Treaties are agreements that cover broad groups of policies such as all of a primary insurer’s auto business.