ACE ACE Reinsurance & Treaty Concepts 2

Question 1

Under a surplus share treaty, what determines the amount of risk ceded to the reinsurer?

Accepted Answer

The amount by which the policy limit exceeds the cedant's retention line

Answer

The insured's credit score

Answer

The reinsurer's capacity at the time of binding

Answer

The geographic location of the insured property

Question 2

What is a 'loss corridor' in an aggregate reinsurance structure?

Accepted Answer

A band of aggregate losses retained by the cedant between two reinsurer layers

Answer

A geographic zone excluded from coverage

Answer

A time-based waiting period before a claim is paid

Answer

A corridor in the policy document listing covered perils

Question 3

Which term describes the primary insurer's share of risk that it retains and does not cede to a reinsurer?

Accepted Answer

Net retained line

Answer

Gross written premium

Answer

Bordereau

Answer

Retrocession

Question 4

What is retrocession in the context of reinsurance?

Accepted Answer

A reinsurer ceding part of its assumed risk to another reinsurer

Answer

The process of canceling a reinsurance treaty mid-term

Answer

The return of unearned premium to the cedant upon treaty termination

Answer

A regulatory requirement for domestic reinsurers

Question 5

In an excess-of-loss per-risk treaty, what does the 'attachment point' represent?

Accepted Answer

The loss amount the cedant must retain before the reinsurer's coverage applies

Answer

The maximum limit the reinsurer will pay

Answer

The date the treaty becomes effective

Answer

The premium rate charged by the reinsurer

Question 6

Which ACORD standard message set is specifically designed for the exchange of reinsurance accounting and settlement data?

Accepted Answer

ACORD REIN (800-series XML messages)

Answer

ACORD AL3

Answer

ACORD CSIO EDI

Answer

ACORD Life XML