B Com Exam > B Com Notes > Principles of Insurance > Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com
Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com | Principles of Insurance PDF Download
What is a Ceding Company
The company ceding the risk, i.e., getting the risk reinsured, and has already been discussed.
What is Cession?
Means the amount of risk ceded for reinsurance, i.e., the amount reinsured.
What is Retrocession?
Means reinsurance of reinsurance. A reinsurer may like to get his interest protected by further reinsurance and so on.
What is Retention?
This refers to the amount of risk retained by the ceding company. The balance is usually reinsured. The amount of retention is dependent on the financial strength of the ceding company for that class of business. It is the refined figure of another term known as LIMIT.
Normally “Limit1’ is a rough guide of the ceding company and depending on the quality and nature of the risk the ceding co. may decide to enhance or reduce the limit for the purpose of actual retention.
What is Line?
A line is equivalent to retention, i.e., the amount retained by the ceding co… A reinsurance arrangement is usually expressed in terms of “line” meaning that if a ceding company has a ten- line or twelve-line reinsurance arrangement (TREATY) it can automatically cede or reinsure up to ten times or twelve times of the amount retained.
Who is a Primary Insured / Assured?
This refers to the primary insured (assured) originally insuring the risk at the first instance. He is one of the parties to the insurance contractand not in the reinsurance contract.
What is Reciprocity?
This is a widely used term in the transaction of the business of reinsurance, indicating a situation involving the desire for the satisfaction of mutual interest.
Normally, the direct insurers, at one time or the other, do transact reinsurance business also in addition to the insurance business.
The document Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com | Principles of Insurance is a part of the B Com Course Principles of Insurance.
All you need of B Com at this link: B Com
|
49 videos|51 docs|14 tests
|
FAQs on Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com - Principles of Insurance
| 1. What is reinsurance and how does it relate to insurance? |  |
Ans. Reinsurance is a process in which an insurance company transfers a portion of its risk to another insurance company. It serves as a mechanism for insurance companies to manage their risks by spreading them across multiple insurers. Reinsurance helps protect insurance companies against large losses and provides them with financial stability.
| 2. What are the principles of insurance that apply to reinsurance? | |
Ans. The principles of insurance that apply to reinsurance are:
- Utmost good faith: Both the insurer and reinsurer must disclose all relevant information honestly and accurately.
- Insurable interest: The insurer must have a valid reason to insure the risk, and the reinsurer must have an insurable interest in the portion of the risk being transferred.
- Indemnity: The reinsurer agrees to compensate the insurer for the actual loss incurred, up to the predetermined limit.
- Subrogation: The reinsurer has the right to step into the shoes of the insurer and pursue recovery from the party responsible for the loss.
- Contribution: If there are multiple reinsurers involved, they share the risk and contribute to the payment of claims proportionately.
| 3. How does reinsurance benefit insurance companies? | |
Ans. Reinsurance provides several benefits to insurance companies, including:
- Risk transfer: Insurance companies can transfer a portion of their risk to reinsurers, reducing their exposure to large losses.
- Financial stability: Reinsurance helps insurance companies maintain financial stability by providing them with additional capital and protection against unforeseen events.
- Capacity enhancement: Reinsurance allows insurance companies to underwrite larger risks and offer higher coverage limits to their policyholders.
- Expertise and knowledge sharing: Reinsurers often have extensive experience and expertise in managing risks, which they can share with insurance companies, helping them improve their underwriting practices and risk management strategies.
| 4. What are the different types of reinsurance arrangements? | |
Ans. There are several types of reinsurance arrangements, including:
- Facultative reinsurance: This is a case-by-case arrangement where the reinsurer evaluates and accepts or rejects each risk individually.
- Treaty reinsurance: This is an ongoing agreement between the insurer and reinsurer, where the reinsurer automatically assumes a predetermined portion of the insurer's risks.
- Proportional reinsurance: In this arrangement, the reinsurer shares a proportional amount of the premiums and losses with the insurer.
- Non-proportional reinsurance: In this arrangement, the reinsurer only pays for losses that exceed a certain threshold or aggregate limit. The insurer retains the remaining losses.
- Excess of loss reinsurance: This type of reinsurance covers losses that exceed a specified amount. The reinsurer pays for the excess loss, while the insurer retains the primary portion of the risk.
| 5. How do insurance companies choose reinsurers? | |
Ans. Insurance companies consider several factors when choosing reinsurers, including:
- Financial strength: Insurance companies assess the financial stability and creditworthiness of potential reinsurers to ensure they can honor their obligations in case of large claims.
- Reinsurer's expertise: Insurance companies look for reinsurers with experience and expertise in the specific line of business they want to reinsure.
- Reinsurer's reputation: Insurance companies consider the reputation and track record of potential reinsurers in terms of claims handling, customer service, and timely payments.
- Pricing and terms: Insurance companies compare the reinsurance pricing and contract terms offered by different reinsurers to determine the most favorable arrangement for their needs.
- Regulatory compliance: Insurance companies ensure that potential reinsurers comply with all applicable regulatory requirements and have the necessary licenses to operate in the relevant jurisdiction.
Related Exams
About this Document
|
4.91/5 Rating |
|
Dec 23, 2024 Last updated |
Document Description: Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com for B Com 2024 is part of Principles of Insurance preparation.
The notes and questions for Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com have been prepared according to the B Com exam syllabus. Information about Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com covers topics
like and Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com Example, for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com.
Introduction of Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com in English is available as part of our Principles of Insurance
for B Com & Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com in Hindi for Principles of Insurance course.
Download more important topics related with notes, lectures and mock test series for B Com
Exam by signing up for free. B Com: Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com | Principles of Insurance
Description
Full syllabus notes, lecture & questions for Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com | Principles of Insurance - B Com | Plus excerises question with solution to help you revise complete syllabus for Principles of Insurance | Best notes, free PDF download
Information about Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com
In this doc you can find the meaning of Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com defined & explained in the simplest way possible. Besides explaining types of
Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com theory, EduRev gives you an ample number of questions to practice Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com tests, examples and also practice B Com
tests
|
Explore Courses for B Com exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
Related Searches
Principles of Insurance
,Important Concept - Reinsurance - Concept of Insurance
,Summary
,B com | Principles of Insurance
,Viva Questions
,Semester Notes
,Important Concept - Reinsurance - Concept of Insurance
,Objective type Questions
,Previous Year Questions with Solutions
,shortcuts and tricks
,Important Concept - Reinsurance - Concept of Insurance
,Principles of Insurance
,Exam
,B com | Principles of Insurance
,B com | Principles of Insurance
,video lectures
,Principles of Insurance
,ppt
,Free
,mock tests for examination
,past year papers
,practice quizzes
,Important questions
,Sample Paper
,Extra Questions
,MCQs
,study material
;
Additional Information about Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com for B Com Preparation
Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com Free PDF Download
The Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com is an invaluable resource that delves deep into the core of the B Com exam.
These study notes are curated by experts and cover all the essential topics and concepts, making your preparation more efficient and effective.
With the help of these notes, you can grasp complex subjects quickly, revise important points easily,
and reinforce your understanding of key concepts. The study notes are presented in a concise and easy-to-understand manner,
allowing you to optimize your learning process. Whether you're looking for best-recommended books, sample papers, study material,
or toppers' notes, this PDF has got you covered. Download the Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com now and kickstart your journey towards success in the B Com exam.
Importance of Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com
The importance of Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com cannot be overstated, especially for B Com aspirants.
This document holds the key to success in the B Com exam.
It offers a detailed understanding of the concept, providing invaluable insights into the topic.
By knowing the concepts well in advance, students can plan their preparation effectively.
Utilize this indispensable guide for a well-rounded preparation and achieve your desired results.
Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com Notes
Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com Notes offer in-depth insights into the specific topic to help you master it with ease.
This comprehensive document covers all aspects related to Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com.
It includes detailed information about the exam syllabus, recommended books, and study materials for a well-rounded preparation.
Practice papers and question papers enable you to assess your progress effectively.
Additionally, the paper analysis provides valuable tips for tackling the exam strategically.
Access to Toppers' notes gives you an edge in understanding complex concepts.
Whether you're a beginner or aiming for advanced proficiency, Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com Notes on EduRev are your ultimate resource for success.
Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com B Com Questions
The "Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com B Com Questions" guide is a valuable resource for all aspiring students preparing for the
B Com exam. It focuses on providing a wide range of practice questions to help students gauge
their understanding of the exam topics. These questions cover the entire syllabus, ensuring comprehensive preparation.
The guide includes previous years' question papers for students to familiarize themselves with the exam's format and difficulty level.
Additionally, it offers subject-specific question banks, allowing students to focus on weak areas and improve their performance.
Study Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com on the App
Students of B Com can study Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com alongwith tests & analysis from the EduRev app,
which will help them while preparing for their exam. Apart from the Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com,
students can also utilize the EduRev App for other study materials such as previous year question papers, syllabus, important questions, etc.
The EduRev App will make your learning easier as you can access it from anywhere you want.
The content of Important Concept - Reinsurance - Concept of Insurance, Principles of Insurance, B com is prepared as per the latest B Com syllabus.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup