Reinsurance management — treaty and facultative reinsurance, structures, pricing and the global reinsurance market.
These are 5 of the 463 IC-85 questions in Certena, taken from across the paper. Every answer key has been checked against a source — a printed answer key, a textbook extract, or arithmetic — not guessed. Reveal the answer and the explanation below each question. No sign-up needed.
Answer: C. Fire and Hull
Historically, the Indian insurance industry set up domestic reinsurance pools for Fire and Hull business in 1966 to reduce the outflow of premium to foreign reinsurers and build up retained capacity within the country. Marine (cargo) and other lines were not the primary focus of this early pooling initiative, so "All of the above" overstates the scope.
Answer: C. Composite companies
Reinsurance subsidiaries set up by direct insurance companies (to reinsure their own or group business) are known as Composite companies in this context, distinguishing them from professional reinsurers who operate independently and accept business from unrelated cedants. Captive companies and underwriting agencies describe different structures — captives are typically self-insurance vehicles for non-insurance parent groups, not reinsurance subsidiaries of direct insurers.
Answer: D. 1,2 and 3
All three statements correctly describe reinsurance consideration: it is the premium the reinsured pays the reinsurer, the terms (including how that premium is derived) are agreed at contract inception, and it is commonly expressed as a share of the original premium net of ceding commission and other deductions. None of these statements contradicts standard reinsurance contract practice, so all three together is the correct choice.
Answer: B. Only 3
Insurable interest under reinsurance principles is vested in the reinsured (the ceding insurer), since it is the reinsured who has an underlying financial stake in the risk being reinsured and stands to suffer loss if the insured event occurs. The reinsurer and the broker do not themselves hold insurable interest in the original risk, which is why "Only 3" is the correct answer.
Answer: A. Decision making on what type of reinsurance arrangements are most suitable
The relevance to the factor Size & structure of the portfolio in reinsurance programme design is, ‘Decision making on what type of reinsurance arrangements are most suitable’.
458 more verified IC-85 questions, timed 100-question mock papers, and your weak areas are in the app — create a free account.
All 463 verified IC-85 questions, timed mock papers and spaced repetition. Free to start — no payment required for practice questions.
Start Free Practice →