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    Question

    What is the purpose of "reinsurance treaties"?

    A To define the terms and conditions of reinsurance contracts between insurers Correct Answer Incorrect Answer
    B To provide legal advice to insurers Correct Answer Incorrect Answer
    C To investigate and settle claims Correct Answer Incorrect Answer
    D To market reinsurance products Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    These are agreements between an insurance company (the "ceding company") and a reinsurer, where the reinsurer agrees to accept specific risks from the ceding company. The primary purpose of a reinsurance treaty is to establish the terms and conditions under which an insurer (the ceding company) transfers a portion of its risks to a reinsurer.

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