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    Question

    A standing agreement between insurers and reinsurers. Under a treaty each party automatically accepts a specific percentage of the insurer’s business is termed as?

    A Catastrophe Reinsurance Correct Answer Incorrect Answer
    B Excess of Loss Reinsurance Correct Answer Incorrect Answer
    C Facultative Reinsurance Correct Answer Incorrect Answer
    D Treaty Reinsurance Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Treaty reinsurance is a type of reinsurance in which the reinsurance company accepts all of a particular type of risk from the ceding insurance company. Treaty reinsurance is one of the three main types of reinsurance contracts, the others being facultative reinsurance and excess of loss reinsurance. Treaty reinsurers are obliged to accept all risks outlined in the treaty reinsurance contract.

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