IC85 - Reinsurance Management Exam - 8

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Q 1. If a treaty reinsurance agreement is between two Indian companies, who are responsible for getting the document stamped?

The foreign reinsurer

The broker

The local government

The Indian ceding insurer

The Indian reinsurer
 
Q 2. What is the purpose of dividing the account into a technical account and a financial account for some ceding insurers?

To simplify the handling of accounts

To conform to international regulations

To show the balance due to reinsurers

To calculate premium and loss reserves

To display items related to the reinsurer's share of the technical result
 
Q 3. In a profit commission on an "Accounting Year" basis, which transactions are included in the same profit commission statement?

Transactions of the same treaty period without reference to underwriting year

All transactions for the same underwriting year without reference to the accounting year

Transactions of the same treaty without regard to any specific period

Transactions of the same calendar year

Transactions of the same treaty period concerning the underwriting year
 
Q 4. What is the purpose of the portfolio transfer or clean-cut method in reinsurance?

To increase the number of reinsurers on a treaty

To allow for multiple accounts in the event of cancellation

To simplify the transition of reinsurers and reduce administrative work

To lower the administrative costs of reinsurance

To provide a method for the natural expiry of treaties
 
Q 5. When is the adjustment account based on actual premium income accounted in reinsurance contracts typically prepared?

Immediately after the inception of the contract

Quarterly throughout the year

As soon as the premium amount is known at the end of the accounting year

Only when there are significant losses

At the discretion of the broker
 
Q 6. According to IFRS, what is the purpose of the Liability Adequacy Test about reinsurance?

To reduce reinsurance liabilities

To eliminate reinsurance assets

To decrease the adequacy of liabilities

To test the impairment of reinsurance assets

To increase reinsurance premiums
 
Q 7. Where is a reinsurer liable to income tax on profit based on their worldwide business?

In the country of their incorporation only

In the country where their head office is located

In every country where they operate

In countries where double taxation agreements exist

In countries where they have branch offices
 
Q 8. What do successful companies in the insurance and reinsurance industry focus on, according to the passage?

Short-term mitigation of risk

The rapid disappearance of syndicates

Annual, account-specific reinsurance

Providing capacity alone

Corporate value and the achievement of corporate objectives
 
Q 9. What percentage of the world's reinsurance premiums do insurers and reinsurers in Bermuda write as of the year 2010?

5%

10%

16%

25%

50%
 
Q 10. When was Lloyd's China established to provide reinsurance capacity for the Chinese insurance market?

2000

2005

2007

2010

2015
 
Q 11. What role does Lloyd's China play in the insurance industry?

It provides insurance coverage to individuals in China.

It promotes international trade in services.

It supervises the operations of all insurance companies in China.

It operates as an insurer in the Chinese market.

It offers political risk insurance to the Chinese government.
 
Q 12. What traditionally influenced the selection of reinsurers in the insurance industry?

Regulatory requirements

Professional reputation and technical support services

The size of the reinsurer's portfolio

Broker's commission rates

Geographical location of the reinsurer
 
Q 13. What is the role of National Scale Ratings, denoted with a prefix like 'mx' or ‘ra’?

To assess the insurer's global market reach

To evaluate the insurer's regulatory compliance

To compare insurers to non-insurance companies

To assess the insurer's financial strength relative to other insurers in its home market

To measure the insurer's corporate social responsibility
 
Q 14. What is an example of a double-trigger policy mentioned in the passage?

An insurance policy for natural disasters

A policy for personal injury

A policy for equipment failure

A policy for storm-related damage

A policy for automobile accidents
 
Q 15. What is the primary purpose of "spread loss" reinsurance contracts?

To provide reinsurance for catastrophic events

To reduce the overall risk exposure of the insurer

To protect the credit risk of the insurer

To offer protection for short-tail claims

To complement traditional insurance policies


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