Reinsurance For Scale Iii & Iv
Reinsurance For Scale Iii & Iv
Reinsurance For Scale Iii & Iv
Sunanda Singh,
Sh.H.S.Shekhawat
Page 1 of 13
(d) Regulator intervention.
Page 2 of 13
(iii) Under the Surplus Treaty, the surplus over and above the retention
can be allotted to one or more reinsurers.
(iv) All of the above.
Page 3 of 13
13. Excess of loss insurance treaty differs from stop loss treaty
because….
(a) Under Excess of loss, the retention is fixed in absolute term i.e.
the limit of the maximum loss.
(b) Under Excess of loss, the retention is fixed in excess of loss ratio.
(c) Excess of loss treaty and stop loss treaty are of same nature.
(d) Excess of loss treaty is difficult to administer.
14. Which of the following is / are true with respect of “ Excess of loss
treaties”?
(i) All claims above a specified limit are paid by the reinsurers.
(ii) All claims below a specified limit are paid by the cedents.
(iii) All claims have to be paid by the reinsurers.
(a) (i) & (ii)
(b) (ii) & (iii)
(c) (i) & (iii)
(d) None of the above.
Page 4 of 13
17. Statement A: The reinsurance agreement must be got properly
stamped and scrutinized.
Statement B : After the document has been duly stamped, and found
in order, it is signed in duplicate.
Statement C : An unstamped copy of agreement returned to the
reinsurer / ceding insurer / concerned Broker.
Statement D : Addendum to the reinsurance agreement may not be
stamped.
Which of the above statements is / are true?
(a) Statement A & B
(b) Statement B & D
(c) Statement C & A
(d) All of the above.
Page 5 of 13
20. Statement A : Aviation reinsurance uses all forms of reinsurance
protection.
Statement B : Aviation reinsurance mainly dependent on Facultative
reinsurance protection.
Which of the above statements is / are true?
(a) Statement A
(b) Statement B
(c) None of above.
(d) Both of the above.
23. Statement A : There are three types of retention namely, per event,
per risk, per portfolio.
Statement B : Retention is a combination of financial consequence
of risk and event based losses.
Which of the above statements is / are true?
(a) Statement A
(b) Statement B
Page 6 of 13
(c) None of the above
(d)Both of the above
25. Statement A : Anticipated Incurred claim ratio to the gross and net
account in a class are very good indices for measuring the effect of
the programme on retentions.
Statement B : Commission component of the reinsurance ceded is
critical in deciding the programme on retention.
Which of the above statements is / are true?
(a) Statement A
(b) Statement B
(c) None of the above
(d)Both of the above
28. The essence of the statement “Most of the present day treaties are
blind” is…
Page 7 of 13
(a) Ceding company supplies no details of individual cessions to
the reinsurer.
(b) Ceding company supplies all the details of the individual
cessions.
(c) Reinsurers are not worried about the quality of the individual
cessions.
(d) The quality of the cessions is always good.
29. The conversion of receivable into cash will have an impact on…
(i) Business relationships between the reinsured and the reinsurer.
(ii) Liquidity position of the reinsured.
(iii) Solvency of the reinsured.
(a) Only (i) above.
(b) Only (ii) above.
(c) Both (i) & (ii) above.
(d) All of the above.
30. Which of the following acts is the relevant act for the reinsurance
companies’ annual accounts format in India?
(a) The IRDA Act, 1999 / Insurance Act, 1938.
(b) The Life Insurance Act, 1956.
(c) The General Insurance Act, 1971.
(d) The Companies Act, 1956.
Page 8 of 13
(c) Under facultative reinsurance both cedent and the reinsurer have
an option to accept or reject.
(d) All of the above.
Page 9 of 13
(a) Proportional Covers.
(b) Non-proportional covers.
(c) Inward reinsurance accounts.
(d) All of the above.
38. Which of the following is true with “follow the fortunes” Clause?
(a) The reinsurer will share the insurance fortunes of the
company as expressed in the reinsurance contract.
(b) The reinsurer will pay the claims notwithstanding the terms and
conditions of the contract.
(c) The reinsurer will not share the fortunes of the company whether
expressed in the contract or not.
(d) It is frequently placed in the facultative certificate.
Page 10 of 13
42. High exposure risk like Petrochemicals explosives are to be
reinsured under……
(a) Facultative arrangement.
(b) Combination of Facultative and excess of loss cover.
(c) Stop loss cover
(d) Either of the (a) & (b) above.
43. Setting up the appropriate retention is essential because…
(a) Setting of low retention will pass on the large part of premium to
reinsurers
(b) Setting a high retention may expose to high losses when claim
occurs
(c) Setting of appropriate retention benefit the ceding insurance
company in earning the good part of reinsurance commission.
(d) All of the above
44. Which of the factors is not influencing the retention limit.
(a) The company’s Assets
(b) The company’s capital / net worth
(c) The Availability capital & free reserves
(d) None of the above
45. The usual schedule of retention fixed for property insurance is based
on..
(a) Location / Separation.
(b) Class of construction & Fire protection.
(c) Process carried on.
(d) All of the above.
Page 11 of 13
(iii) Under Quota Share and Surplus combined, the reinsurance
protection is first provided by a Surplus Treaty then by Quota
Share Treaty.
(iv) Under Quota share and Surplus combined the ceding insurer does
not keep two retentions one under each treaty.
(a) (i) , (ii) & (iv)
(b) (i), (iii) & (iv)
(c) None
(d) All of the above
Page 12 of 13
Page 13 of 13