IC85 REINSURANCE MANAGEMENT EXAM - 15
| 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. |