Insurance Awareness - Reinsurance
Which of the following types of reinsurance involves covering specific individual risks rather than a portfolio?
Which of the following types of reinsurance involves covering specific individual risks rather than a portfolio?
medium Q15 of 15
Step-by-Step Solution
Step 1: Differentiate reinsurance types
Facultative reinsurance covers individual risks on a case-by-case basis, unlike treaty reinsurance which covers a portfolio.Final Answer:
Facultative Reinsurance → Option DQuick Check:
Treaty reinsurance is automatic for a portfolio; facultative is selective for individual risks.
Quick Trick: Facultative = individual risk; Treaty = portfolio risk.
Common Mistakes:
MISTAKES- Confusing facultative with treaty reinsurance.
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