Insurance Awareness - Reinsurance
Which type of reinsurance involves the reinsurer evaluating and accepting each risk individually?
Which type of reinsurance involves the reinsurer evaluating and accepting each risk individually?
easy Q11 of 15
Step-by-Step Solution
Step 1: Understand reinsurance types
Facultative reinsurance is characterized by risk-by-risk acceptance, where the reinsurer assesses each risk separately before accepting it.Final Answer:
Facultative Reinsurance → Option BQuick Check:
Treaty reinsurance covers a portfolio automatically, so only facultative involves individual risk evaluation.
Quick Trick: Facultative = 'Faculties' to choose each risk individually.
Common Mistakes:
MISTAKES- Confusing facultative with treaty reinsurance which covers all risks automatically.
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