Insurance Awareness - Reinsurance
Which of the following statements about the importance of reinsurance in the Indian insurance market is MOST accurate?
Which of the following statements about the importance of reinsurance in the Indian insurance market is MOST accurate?
hard Q10 of 15
Step-by-Step Solution
Step 1: Understand reinsurance role in India
Reinsurance helps Indian insurers manage large risks and meet IRDAI’s capital adequacy norms.Step 2: Analyze options
Reinsurance supports Indian insurers in managing large risks and complying with regulatory capital requirements is correct. Reinsurance is only important for foreign insurers operating in India is false as reinsurance is important for all insurers. Reinsurance allows Indian insurers to avoid paying claims to policyholders is incorrect because claims must be paid. Reinsurance is not regulated by any authority in India is wrong as IRDAI regulates reinsurance.Final Answer:
Reinsurance supports Indian insurers in managing large risks and complying with regulatory capital requirements → Option BQuick Check:
IRDAI regulation and risk management confirm Reinsurance supports Indian insurers in managing large risks and complying with regulatory capital requirements as correct.
Quick Trick: Link reinsurance with regulatory compliance and risk management in India.
Common Mistakes:
MISTAKES- Assuming reinsurance is unregulated or only for foreign insurers.
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