CMFAS Reinsurance Premium Quiz 16

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Question 1 of 30

1. Question
Which of the below is considered to be a true statement about facultative-obligatory reinsurance?
- Facultative-obligatory reinsurance doesn't need necessary to breaks any symmetry. Its purpose is the risk cover of a category or a sub-category during a given period.
- Facultative-obligatory reinsurance breaks this symmetry between the freedom to cede and to accept to the detriment of the reinsurer. Its purpose is the risk cover of a category without a certain period given.
- Facultative-obligatory reinsurance breaks this symmetry between the freedom to cede and to accept to the detriment of the reinsurer. Its purpose is the risk cover of a category or a sub-category during a given period.
- Facultative-obligatory reinsurance breaks this symmetry between the freedom and exception to the detriment of the reinsurer. Its purpose is the risk cover of a category or a sub-category during a given period.
Correct

Incorrect

Taken the official definition of the facultative-obligatory reinsurance, it has as main purpose the risk cover of a category or a sub-category during a given period.
Question 2 of 30

2. Question
What are some of the elements used to calculate a reinsurance premium under the per occurrence catastrophe contract?
I. Limit being uninstalled.
II. limit being reinstated.
III. Time element.
IV. Annual premium.
- I Only
- II & III
- II, III & IV
- All of the above
Correct

Incorrect

The main elements that are part in calculating the reinsurance premium under the per occurrence catastrophe contract are the limit being reinstalled, time and the annual premium.
Question 3 of 30

3. Question
Which of the statement from the solutions offered about prudent insurers do you consider to be true?
- The prudent insurers will avoid over-exposure on any risk.
- The prudent insurers will always only take risks they have experience in.
- The prudent insurers will only use facultative reinsurance to reinsure business.
- The prudent insurers will focus on profit only.
Correct

Incorrect

The prudent insurers always try to avoid, in any situation that they have to face it with, over-exposure on any risk.
Question 4 of 30

4. Question
Which of the below is a true statement about reinsurance considering the variants you are given?
I. Reinsurance helps insurers address lack of experience available to price risks.
II. Reinsurance helps insurers refine underwriting skills.
III. Reinsurance helps insurers develop new product ideas.
IV. Reinsurance helps insurers underwrite risks beyond their own capacity/willingness to retain such risks.
- I & II
- II & III
- III & IV
- All of the above
Correct

Incorrect

Reinsurance helps insurers address lack of experience, refine underwriting skills, develop new ideas and deal with risks.
Question 5 of 30

5. Question
Given the answering options below, which do you consider to be true regarding the non-proportional life reinsurance structures?
I. Part of the structures is the risks that are not ceded individually by the policy.
II. Non-proportional life reinsurance structures include catastrophe coverage.
III. The non-proportional life reinsurance structures cover stop loss.
IV. The non-proportional life reinsurance structures don’t cover stop loss.
- I, II & III
- II & III
- III & IV
- All of the above
Correct

Incorrect

The non-proportional life reinsurance structures include the risks that are not ceded individually by the policy, catastrophe coverage and structures cover stop loss.
Question 6 of 30

6. Question
What does providing underwriting guidance reinsurance does compared to the other types?
- This reinsurance deals with the situation where management wants to enter the market, or believes that it must be in one market to support another of its markets but does not feel comfortable with its expertise in that new market.
- This reinsurance deals with the situation where management wants to enter a new market, or believes that it must be in one market because it does not feel comfortable with its expertise in that new market.
- This reinsurance deals with the situation where management wants to enter a new market, or believes that it must be in one market to support another of its markets but does not feel comfortable with its expertise in that new market.
- This reinsurance deals with the situation where management wants to enter a new market, or believes that it must be in one market to support another of its markets but does not feel comfortable with its expertise in that existing market.
Correct

Incorrect

Compared to the other types o reinsurance, the underwriting deals with the situation where management wants to enter a new market.
Question 7 of 30

7. Question
Which of the below do you consider it to be a true statement regarding a reinsurance program?
- A combination of different types of insurance that the insurers construct, having analysed their book of business and tried to calculate where they need protection and how best to obtain maximum protection for the minimum payment of premium.
- A combination of different types of reinsurance that the insurers construct, having analysed their book of business and tried to calculate where they need protection and how best to obtain maximum protection for the maximum payment of premium.
- A combination of different types of reinsurance that the insurers construct, having analysed their book of business and tried to calculate where they need protection and how best to obtain maximum protection for the minimum payment of premium.
- A combination of different types of reinsurance that the insurers construct, having analysed their book of business and tried to calculate where they need protection and how best to obtain minimum protection for the maximum payment of premium.
Correct

Incorrect

The reinsurance program is a combination of multiple types of reinsurance with the scope of getting the best protection and the best payment possible.
Question 8 of 30

8. Question
Which of the below is a true sentence regarding the definition of the treaty reinsurance?
- Treaty reinsurance is insurance owned by the insurance company from another insurer. The company that issues the insurance is called the cedent, who passes on all the risks of a specific class of policies to the purchasing company, which is the reinsurer.
- Treaty reinsurance is insurance purchased by an insurance company from another insurer. The company that issues the insurance is called the incident, who passes on all the risks of a specific class of policies to the purchasing company, which is the reinsurer.
- Treaty reinsurance is insurance purchased by an insurance company from another insurer. The company that issues the insurance is called the cedent, who passes on all the risks of a specific class of policies to the purchasing company, which is the insurer.
- Treaty reinsurance is insurance purchased by an insurance company from another insurer. The company that issues the insurance is called the cedent, who passes on all the risks of a specific class of policies to the purchasing company, which is the reinsurer.
Correct

Incorrect

Shortly, treaty reinsurance refers to insurance bought from another insure person.
Question 9 of 30

9. Question
What does a reinsurer consider when he is presented with a risk?
I. Wants to know about the cedant’s business type and how this performs.
II. How is the business run by the owner.
III. If they have proper systems for collecting data about the risks.
IV. If the system is proper so they can write to provide, as the reinsurer, with proper data.
- I, II & III
- II & III
- III & IV
- All of the above
Correct

Incorrect

Each time a reinsurer is presented with a risk, he wants to know how the business performs, if he is going to invest in it, how does the owner-run this particular business. And finally how the system of collecting data is working towards risks.
Question 10 of 30

10. Question
What does the clause from the full reinsurance stipulate in any general type of contract?
- This is also known as a back to the back clause and the intention is that the reinsurance will mirror the original insurance loss written so that there are no gaps.
- This is also known as a back to the back clause and the intention is that the insurance will mirror the original reinsurance loss written so that there are no gaps.
- This is also known as a back to the back clause and the intention is that the reinsurance will mirror the original insurance gain written so that there are no gaps.
- This is also known as a back to the back clause and the intention is that the reinsurance will mirror the original insurance loss written so that there are gaps.
Correct

Incorrect

The clause regarding the full reinsurance mentions in the contract refers to the insurance loss being written with no gaps.
Question 11 of 30

11. Question
What does the claims control clause include considering the options you are given?
- The reinsurer has some control over claims and dictates how they are handled and when and if they are paid.
- The reinsurer has control over claims but cannot dictates how they are handled and when and if they are paid.
- The reinsurer has full control over claims and dictates how they are handled and when they are paid.
- The reinsurer has full control over claims and dictates how they are handled and when and if they are paid.
Correct

Incorrect

The claims control clause include control regarding the claims. Particularly about how these are paid and handled.
Question 12 of 30

12. Question
What do losses occurring basis means considering the variants offered below?
- This means that the date of gain must be within the reinsurance treaty period, irrespective of when the risk attached which may be before the reinsurance treaty came into effect.
- This means that the date of loss must be within the reinsurance treaty period, irrespective of when the risk attached which may be before the reinsurance treaty came into effect.
- This means that the date of loss must be within the reinsurance treaty period, respectively of when the risk attached which may be before the reinsurance treaty came into effect.
- This means that the date of loss must be within the reinsurance treaty period, irrespective of when the risk attached which may be after the reinsurance treaty came into effect.
Correct

Incorrect

Usually, the losses occurring refers to the reinsurance treaty period, with a focus on the risk attached to it.
Question 13 of 30

13. Question
Which are some of the reasons reinsurance is needed, in general in which situations?
I. Increase some assets.
II. Increase in UW capacity.
III. Decrease some expenses.
IV. Improve portfolio of insureds.
- I, II & IV
- II, III & IV
- III & IV
- None of the above
Correct

Incorrect

Reinsurance is needed for various reasons depending on the case and the person that requires it. However, the most common situations when it comes in need is when someone increases its ownership of UW capacity, the business portfolio is getting bigger, but also to decrease some of the cost he faces.
Question 14 of 30

14. Question
How does in general reinsurance improve someone’s portfolio of insureds considering the statements?
I. Divide risk into smaller parts.
II. Protection from pyramiding.
III. Global scale.
IV. Experience of the reinsurer.
- I & II
- II & III
- III & IV
- All of the above
Correct

Incorrect

Most of the time reinsurance helps an individual improve its portfolio in all of the cases and situations presented here: divide risk into small parts, protect from pyramiding, global scale and personal experience of the reinsurer.
Question 15 of 30

15. Question
What can be some of the things that can only be transferred by reinsurance given the options?
I. Parts of a single risk.
II. Parts of risks of certain types.
III. Parts of total risk balancing risk.
IV. Parts of partial risk involved.
- I, II & III
- II, III & IV
- III & IV
- None of the above
Correct

Incorrect

The things that can only be transferred by reinsurance are a single risk, risk regarding certain types and parts of the total risk balancing risk.
Question 16 of 30

16. Question
Which are some of the main differences between the coinsurance and reinsurance considering the variants?
I. All coinsurers are contracting partners of the policyholder while the reinsurer is contracting partner only of the insurer.
II. All coinsurers and their quotas are indicated in the contract while the policyholder does not know whether the risk they had was insured.
III. The policyholder has a claim against each co-insurer in case of damage while the policyholder has no claim against the reinsurer.
IV. The policyholder has one claim only against each co-insurer in case of loss while the policyholder has multiple claims against the reinsurer.
- I, II & III
- II & III
- III & IV
- None of the above
Correct

Incorrect

The main differences between the coinsurance and reinsurance are that the coinsurers and their quota is mentioned in the contract, they are also the contracting partners of the policyholder and the claim against each co-insurer had no actual claim against the reinsurer.
Question 17 of 30

17. Question
Which sentence do you consider to be true when you think about the facultative reinsurance?
- The secondary insurer decides whether to take out insurance, the reinsurer decides whether or not to agree to assume this risk.
- The primary insurer decides whether or not to take out insurance, the insurer decides if to agree and to assume this risk.
- The secondary insurer decides whether or not to take out reinsurance, the reinsurer decides whether or not to agree to assume this risk.
- The primary insurer decides whether or not to take out reinsurance, the reinsurer decides whether or not to agree to assume this risk.
Correct

Incorrect

In the facultative reinsurance, the reinsurer can decide if he accepts the risk or not.
Question 18 of 30

18. Question
How would the semi-obligatory reinsurance be defined considering the below options given?
- With a treaty, the secondary insurer gets to decide whether or not to submit risks of a certain type and the reinsurer is bound to assume these risks.
- With a treaty, the primary insurer gets to decide if to submit risks of a certain type and the reinsurer is bound to assume these risks.
- With a treaty, the primary insurer gets to decide whether or not to submit risks of a certain type and the insurer is bound to assume these assets.
- With a treaty, the primary insurer gets to decide whether or not to submit risks of a certain type and the reinsurer is bound to assume these risks.
Correct

Incorrect

The semi-obligatory reinsurance could include the clause that the reinsurer assumes to the risks.
Question 19 of 30

19. Question
Which of the below are considered dividend options in life insurance policies?
I. Reduced premium.
II. Accumulation of interest.
III. Paid-up option.
IV. One-year endowment.
- I & II
- II & III
- III & IV
- All of the above
Correct

Incorrect

The dividend options that are included in life insurance policies are the reduced premium, paid-up option, one-year endowment and accumulation of interest.
Question 20 of 30

20. Question
What happens to a policy’s cash value under an extended-term nonforfeiture option?
- The assets value is converted to the same face amount as in the whole life policy.
- The cash value is converted to the same face amount as in the whole life policy.
- The cash value is converted to about the same amount as in the whole life policy.
- The cash value is converted to the same face amount as the reinsurer agreed upon.
Correct

Incorrect

In case of the policy’s cash value under an extended-term nonforfeiture, the cash value is converted to the same face amount as in the whole life policy.
Question 21 of 30

21. Question
Who controls changes in the premium payments, face values, and loans in a life insurance policy?
- Primary beneficiary.
- Secondary beneficiary.
- Policy owner.
- The reinsurer.
Correct

Incorrect

The person that controls changes in the premium payments face values, and loans in a life insurance policy is called the policy owner.
Question 22 of 30

22. Question
What type of beneficiary can usually be changed at any point by the policy owner?
- Revocable.
- Unrevocable.
- A reputable.
- Irrational.
Correct

Incorrect

The type of beneficiary that can usually be changed at any point by the policy owner is revocable.
Question 23 of 30

23. Question
What is the advantage of reinstating a life insurance policy as opposed to applying for a new one?
- Policy secondary in a reinstated policy will be set according to the insured’s original age.
- Policy premium in an unstated policy will be set according to the insured’s original age.
- Policy premium in a reinstated policy will be set according to the reinsurer initial policy.
- Policy premium in a reinstated policy will be set according to the insured’s original age.
Correct

Incorrect

The main advantage of reinstating a life insurance policy is that it can be set according to the insured’s original age.
Question 24 of 30

24. Question
What tasks can an M.A. help with in regards to fees for services rendered?
I. Ensure that patient information is current & up to date.
II. Explain to patients office policy pertaining to a fee for services.
III. Send an explanation of patient bill letters.
IV. Follow up on insurance claims, collect co-pays at the time of services.
- I & II
- II & III
- III & IV
- All of the above
Correct

Incorrect

An M.A. can help with the fees for services such as ensure and explain that patient information is current & up to date, follow up on insurance claims, collect co-pays at the time of services.
Question 25 of 30

25. Question
What is the appropriate procedure for patients that file bankruptcy?
- Usually, a no-asset situation and debts are paid in order with secured debts first.
- Usually, a checking situation where debts are paid in order with secured debts first.
- Usually, a no-asset situation and debts are paid in order with secured debts secondly.
- Usually, an asset situation and debts are paid in order with secured debts first.
Correct

Incorrect

The most appropriated procedure for patients that want to file bankruptcy is a no-asset situation, in which the debt is always paid.
Question 26 of 30

26. Question
Which of the below is a true sentence about capitation, considering the options?
- Insurance payment that pays a paid, stated amount to the provider for covered services within a stated period of time.
- Insurance payment that pays a prepaid, stated amount to the provider for covered services without a stated period of time.
- Insurance payment that pays a prepaid, stated amount to the provider for covered services within a stated period of time.
- Reinsurance payment that pays a prepaid, stated amount to the provider for covered services within a stated period of time.
Correct

Incorrect

The capitation refers to the money needed to be paid in order to cover for services.
Question 27 of 30

27. Question
What dividend option can increase the death benefit of the existing life policy?
- Unpayable additions.
- Paid-up assets.
- Unpayable credits.
- Paid-up additions.
Correct

Incorrect

The dividend option that can increase the death benefit of the existing life policy is the paid-up additions.
Question 28 of 30

28. Question
How would you define what consideration is when this is on the part of the insurer considering the options given?
- A promise to pay some of the assets left.
- A promise to pay back to the owners.
- A promise to pay policy benefits.
- A promise to pay according to the individual's benefits.
Correct

Incorrect

We can translate consideration as a promise did on the part of the insurer, for example, to pay the policy benefits.
Question 29 of 30

29. Question
What is the Appointed Actuary’s (AA) role in regard to reinsurance considering the statements?
I. Considerations of reinsurer’s and ceding company’s AA are different, but parallel.
II. Quality data is the responsibility of both reinsurer and ceding company.
III. A may not receive enough data or may not be sure about the recoverability of benefits.
IV. AA is responsible for an accurate statement of liabilities.
- I & II
- II & III
- III & IV
- All of the above.
Correct

Incorrect

Appointed Actuary’s (AA) role is diverse and doesn’t include only one aspect. However, the most known ones and important are the ones mentioned as an answer to this question.
Question 30 of 30

30. Question
What is the trading of reinsurance treaties between insurers referred to considering the below?
- Retrocession.
- Reciprocal exchange.
- Treaty reinsurance.
- Facultative reinsurance.
Correct

Incorrect

The trading of reinsurance treaties between insurers referred to reciprocal exchange.

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