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    Question

    A form of reinsurance that indemnifies the ceding company for the accumulation of losses in excess of a stipulated sum arising from a single catastrophic event or series of events 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

    Catastrophe reinsurance is purchased by an insurance company to reduce its exposure to the financial risks associated with a catastrophic event occurring. Catastrophe reinsurance allows the insurer to shift some or all of the risk associated with policies that it underwrites in exchange for a portion of the premiums that it receives from policyholders.

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