Insurance Awareness - Reinsurance
Which type of reinsurance involves the insurer ceding risks on a case-by-case basis to the reinsurer?
Which type of reinsurance involves the insurer ceding risks on a case-by-case basis to the reinsurer?
easy Q12 of 15
Step-by-Step Solution
Step 1: Understand types of reinsurance
Facultative reinsurance is arranged for individual risks, case-by-case, unlike treaty reinsurance which covers a portfolio.Final Answer:
Facultative Reinsurance → Option DQuick Check:
Facultative reinsurance is the correct term for case-by-case risk ceding, while treaty covers a block of risks.
Quick Trick: Mnemonic: F for Facultative = Fine-tuned, individual risk.
Common Mistakes:
MISTAKES- Mixing facultative with treaty reinsurance which is portfolio-based.
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