Which of the Following Statements About Reinsurance Is True

question 18

Multiple Choice

Which of the following statements about reinsurance is true?

• A)A reinsurer may not purchase reinsurance.
• B)The reinsurer is the first insurer that provides claims services to the insured after a loss occurs.
• C)The amount of insurance transferred to a reinsurer is called the net retention.
• D)The insurer transferring business to a reinsurer is called the ceding company.

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Definitions:

Information Transfer

The process of moving data and knowledge from one entity or place to another, often through communication or technology.

Monitoring

The act of observing, checking, and keeping a continuous record of a process or quality over a period of time.

Principle

A fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.

Performance Evaluation

The process of assessing the performance of employees, systems, or organizations against predefined standards.