IC85 - Reinsurance Management Exam - 10

Get More Mock Tests Here


Q 1. What is the primary difference between a profit commission on an "Accounting Year" basis and an "Underwriting Year" basis?

The timing of profit commission statement preparation

The inclusion of premium reserves in the statement

The accounting of cash reserves by the ceding insurer

The reference to the calendar year in the statement

The deferral of all profit commission calculations

Q 2. What is the portfolio transfer method in reinsurance used for?

To increase the reinsurance commission

To simplify the transition of reinsurers

To calculate the unexpired portion of sessions

To determine the gross portfolio to be withdrawn by the ceding insurer

To calculate the portfolio premium for the ceding insurer

Q 3. Which party typically pays the minimum and deposit premium in a reinsurance contract?

The reinsured

The broker

The reinsurer

Both the reinsured and the broker

The retrocessionaire

Q 4. Under IFRS, how are reinsurance assets and related liabilities presented?

They are combined into a single line item on financial statements.

They are presented separately and distinctly in financial statements.

They are omitted from financial statements.

They are presented as a net amount on financial statements.

They are presented in the currency of the reinsurer.

Q 5. What is one way for reinsurers to potentially reduce administrative work related to interest on premium reserve released?

Increase commission rates

Adjusting the premium rates

Waiving interest on premium reserve

Refusing to pay income tax

Moving to countries without income tax

Q 6. What is the Information Age's need for insurance?

Less need for insurance due to increased safety measures

No need for insurance in the Information Age

Insurance will be required even more but served in non-conventional ways

Insurance needs are limited to natural disasters

Insurance is not relevant in the Information Age

Q 7. Which set of requirements regulates large insurers and reinsurers in Bermuda, ensuring they meet international regulatory standards?

US regulatory standards

Separate and distinct requirements

European regulatory standards

Latin American regulatory standards

Australian regulatory standards

Q 8. Which city is planning to set up an exchange based on the Lloyd's of London model with advanced technology platforms and contract certainty?

London

Singapore

New York

Hong Kong

Bermuda

Q 9. What role does Lloyd’s of London play in facilitating its syndicates to operate in different geographies?

It serves as a regulator for all Lloyd's syndicates.

It provides capital to all syndicates.

It establishes its presence in various countries.

It supervises the operations of syndicates outside London.

It acts as a banker to syndicates operating in foreign geographies.

Q 10. What role did brokers play in the selection of reinsurers in the past?

Brokers had no involvement in the selection process.

Brokers provided financial evaluations of reinsurers.

Brokers placed covers directly with reinsurers.

Brokers solely relied on regulatory guidelines.

Brokers focused on marketing the reinsurer's services.

Q 11. What does the Insurance Regulatory and Development Authority (IRDA) in India monitor as a key measure of financial health for insurers and reinsurers?

Customer feedback

The number of policies sold

Solvency margin

Social media presence

Stock market performance

Q 12. When is contingent capital used as a risk management solution?

Before the occurrence of a loss event

During the occurrence of a loss event

After the occurrence of a loss event

In anticipation of a loss event

When there is a surplus of capital

Q 13. What is the effect of a "loss portfolio transfer" on the insurer's balance sheet?

It increases the insurer's solvency margin.

It reduces the insurer's exposure to actual settlement.

It eliminates outstanding losses from the balance sheet.

It transfers the entire loss portfolio to the reinsurer.

It diminishes the loss reserve to the extent of the transfer of outstanding losses.

Q 14. According to the Swiss Re study, how much of the world's commercial non-life premium is estimated to be retained each year in large corporation captive insurance and self-insurance?

Less than 5%

Approximately 10%

Around 15%

About 25%

Over 50%

Q 15. How can accumulation risks arising from inward reinsurance business be controlled?

By ceding all risks to retrocession

By minimizing retrocession use

Through proper information systems and retrocession

By writing business with regions prone to natural perils

By focusing on earthquake and cyclone coverage



Get More Mock Tests Here