Insurance Awareness - Reinsurance
In proportional reinsurance, the reinsurer's share of premiums and claims is based on:
In proportional reinsurance, the reinsurer's share of premiums and claims is based on:
easy Q2 of 15
Step-by-Step Solution
Step 1: Define proportional reinsurance
Proportional reinsurance means the reinsurer receives and pays a fixed percentage of premiums and claims respectively.Step 2: Eliminate other options
Losses exceeding retention relate to non-proportional; case-by-case is facultative; profit-sharing alone is not proportional reinsurance.Final Answer:
A fixed percentage agreed in the contract → Option BQuick Check:
Proportional means sharing in agreed fixed ratios.
Quick Trick: Proportional = Proportionate sharing of premium and loss.
Common Mistakes:
MISTAKES- Mixing proportional with non-proportional reinsurance concepts.
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