Insurance Awareness - Reinsurance
Facultative reinsurance is primarily used when the ceding insurer wants to:
Facultative reinsurance is primarily used when the ceding insurer wants to:
easy Q1 of 15
Step-by-Step Solution
Step 1: Understand the purpose of facultative reinsurance
Facultative reinsurance is used to cede individual risks, especially large or unusual ones, selectively to reinsurers.Final Answer:
Transfer specific high-value or unusual risks individually → Option AQuick Check:
Transfer specific high = correct answer ✅
Quick Trick: Facultative = individual risk transfer, not automatic.
Common Mistakes:
MISTAKES- Confusing facultative with treaty reinsurance which covers all risks automatically.
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