IC85 REINSURANCE MANAGEMENT EXAM - 15

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Q1.In a reinsurance company, Who is responsible for the acceptance of business and the profits made?
   a) Agents
   b) Brokers
   c) Underwriters
   d) Regulators
 
Q2.The clause which provides that in the event of the reinsured's insolvency any part of a loss covered by reinsurance be paid directly to the original insured by the reinsurer-
   a) Commutation clause
   b) Intermediary clause
   c) Reinsuring clause
   d) Cut through clause
 
Q3.Reinsurance ledgers are typically held by.
   a) Brokers
   b) Reinsurers
   c) Reinsured
   d) Either (b) or (c) above.
 
Q4.Utilisation ratio is
   a) Total ceded earned premium / Assumed earned premium.
   b) Total ceded earned premium / Direct premium.
   c) Total ceded earned premium / (Direct + Earned premium)
   d) (Direct + Earned premium) / Total ceded earned premium.
 
Q5.The most common form of proportional treaties are.
   a) Facultative obligatory Treaty.
   b) Surplus / Quota Share.
   c) Excess of loss Treaty.
   d) Stop loss Treaty.
 
Q6.Why is the concept of retention important to the underwriter?
   a) Because it helps the underwriter to determine the amount of reinsurance cover required.
   b) It helps the underwriter to know about the accumulation of risks.
  c) To ensure that the insurance company is not exposed to an unacceptable levels of losses.
   d) All the above
 
Q7.The relationship between variance and stand ard deviation is
   a) Variance is the square root of st andard deviation
   b) St and ard deviation is the square of variance
   c) Variance is equal to standard deviation
  d) Square of the standard deviation is equal to the variance
 
Q8.The transaction whereby the reinsurer cedes to another insurer or reinsurer all or part of the reinsurance it has previously assumed
   a) Retention
   b) Retrocession
   c) Reinstatement
   d) Coinsurance
 
Q9.Which designation will be provided to the insurance company if credit rating agency feels that the rating of the insurer may be raised, lowered, or affirmed?
   a) Positive
   b) Negative
   c) Developing
   d) Emergent
 
Q10.Which of the following parties is/are responsible for the original policyholder's claim? (i) The reinsurer. (ii) The cedent.
   a) Only (i) above.
   b) Only (ii) above.
   c) Both (i) and (ii) above.
   d) None of the above.

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