Annuity risk is one of the key long-term inflation threats. One can set down separate provisions for Indexed Annuity statements, but in the event of a Stabilization Agreement, it is highly recommended not to do so for two primary reasons. Choose the correct two reasons from the ones given below.
I. It is also safer to agree with the so-called “mixed” claim: daily payments do not agree with the SC because all annuity payments will be regulated by the IAC, which would, in turn, lead to a resolution of the conflict.
II. It is a compulsion to have a separate IAC since all of the properties of the Indexed Annuity fall seamlessly into the SC.
III. It becomes much more difficult to comply with the so-called “mixed” claim: routine payments will obey the SC while all annuity payments will be controlled by the IAC, which in effect will lead to dispute.
IV. It is not necessary to have a separate IAC, because all of the properties of the Indexed Annuity fall seamlessly into the SC.

With regard to the premium and the related risks, what are the chief concerns of the reinsurer and the insurer?
I. The reinsurer wants a premium that is low enough.
II. The insurer would like to pay a decent rate.
III. The reinsurer needs a premium that is high enough.
IV. The insurer wishes to pay a rate comparatively higher than that of the reinsurer.

Which of the following forms of the premium is to be charged by the re-insured at the date of the contract?

By the end of the contract year, the deposit rate is changed to take into account the fact that the performance of the portfolio varies from the expected inflation. Under fact, the premium shall be offered as a percentage of:

The clause describing the premium as a proportion of the total net premium profit is referred to as:

The insurance premium shall be the amount equal to the allocation of the rate to the insurer’s calculation of the amount of profits. This is usually paid in:

The insurer must have charged the full amount of the fixed premium and the adjusted rate before the completion of the year because:
I. The adjusted premium takes into account the estimated premium profits over the treaty year which refers to the sequential adjustment of the reinsurance rate.
II. The fixed premium shall be the maximum value that the reinsurer expects to spend by the end of the year.
III. The adjusted premium covers the estimated premium losses by the end of the treaty year which refers to the sequential adjustment of the reinsurance rate.
IV. The fixed premium shall be the minimum value that the reinsurer expects to earn at the end of the year.

The key priority of the reinsurer is to receive a reasonably high premium, while the insurer needs to pay a reasonable premium. From the three distinct premiums, which of the given claims accurately define the minimum premium?
I. This is always equivalent to the loan rate, except when the portfolio is expected to fall.
II. It is the fixed amount that will be charged by the reinsured.
III. This shall be granted as a percentage of the total net premium income.
IV. It is determined using details supplied to the reinsurer by the insurer.

It is critical for the insurer to have reliable estimates of production. If the increase has been underpriced, the adjusted premium would be:

As far as the quality of the growth estimate is concerned, if the progress has been overstated, then:

The provision stating that the reinsurer may audit all records and documents relating to the company involved by an appointed person shall be called:

Pick the statements that accurately describe the nature and characteristics of the reset risks.
I. Reset risk is an option available for a single-year insurance policies.
II. Reset exposure exits for CAT Bonds that normally last three years.
III. Reset risk is an option available for multi-year insurance policies.
IV. Reset exposure exits for all except for CAT Bonds that normally last five years.

The reset risk consists in the assumption that the reinsurance policy will be adjusted to the portfolio in question during the first year of operation, but no longer in the following years. This may be attributed to:
I. Significant variance of the Fx rate where there is no price volatility clause.
II.A decrease in the total insured sum due to inflation or a shift in underwriting policies.
III. Consistent number of threats.
IV. A consistent view of the risk.

In the case of standard reinsurance, under multi-year arrangements, there is a provision stating that the conversion provider and the reinsurer communicate their desire to maintain the equal interest of the target and cap negotiated, which may be changed in the same proportion if there is a significant shift in the index. The clause is:

Considering an underwritten 20 XS 10 sheet in 2008, when the index moves from 100 in 2008 to 110 in 2009, this level would become:

For the event of insolvency of the insurer, the insolvency clause states that:

Except as clearly specified, in the case of default of a re-insurer covering a line, the other re-insurers do not pay the resulting refund. This is the case with:

Which provision states that if the excess risk treaty covers the net preservation of the proportional treaty, it will not cover the insurer if either of the proportional underwriter refuses to pay the share under the proportional treaty?

In modeling, we sometimes forget the insolvency of the reinsurers (and the insurer, as we presume, is effective!). The primary explanation for this is:

In order to shield the insurer from the liquidation of reinsurers, there are distinct clauses referred to as:

Downgrading clauses are the termination clause stating that, in several of the situations mentioned below, the insurer has the option to cancel the reinsurance arrangement with an automatic non-retroactive effect. Pick the best ones to choose from.
I. The reinsurer is bankrupt.
II. Insurers face a reduction in financial performance status above a certain point.
III. The insurer decides to sell off his non-existent company.
IV. The reinsurer refuses to meet its substantive responsibilities under the reinsurance arrangement.

This clause simplifies the handling of damages. Instead of waiting for the actual insurer’s premiums, the re-insurers’ premiums are based on conditions negotiated on the expiration date of the contracts. It is a:
I. Commutation clause
II. Stability clause
III. Termination clause
IV. Clean cut clause

Pursuant to the Clean Cut rule, reinsurers pay their share of the requirements in order to liberate from adverse trends in open claims and late claims in compliance with:

The ‘clean-cut’ clause is often employed in proportional agreements, because:
I. The danger to the insurer is that the terms of the policy are not legal.
II. It is challenging to cite these treaties.
III. It is challenging to analyze these treaties.
IV. The danger to the insurer is that the terms of the policy are not adjusted.

The insurer has the right of repaying potential claims to a certain sum under the:

If there is no termination, which provision does the insurer cover in the event of failure of the underwriter in the years after the year of the contract?

The technical reserve clause provides that the reinsurer shall invest with the reassuring party a sum that is:

Within the Representation of Strategic Reserves, the investment is made on a trustee ‘s account and could be:
I. A liability deposit
II. A pledge of risk exposure
III. A pledge of securities
IV. A cash deposit

Where there is no termination, the interpretation of the contractual contingency provision shall shield the insurer from the default of the reinsurer in the years following the year of the deal. Deposits carry interest at a rate usually related to EONIA if the deposit is:

Within Representation of Strategic Assets There is also a counterparty risk in practice, since the investment is listed on the market only: