Exam 7 Practice Question 7
Study guide: Exam 7
A primary insurer estimates the losses it cedes to reinsurers. Determine which of the following statements about estimating its ceded losses are true.
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I. Because surplus share is a form of proportional reinsurance, the age-to-age factors for gross, ceded and net losses on a surplus share treaty are identical, as they are on a quota share.
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II. The insurer analyzes gross losses by accident year. If the ceded percentage of a risks-attaching quota share treaty changes, the new percentage applies to all losses with accident dates after the change.
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III. Stop-loss reinsurance typically applies after all other reinsurance, so the losses ceded to it are measured on the insurer's net result after those other covers.
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A) I only
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B) I and II only
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C) I and III only
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D) II and III only
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E) The answer is not given by (A), (B), (C), or (D)
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