- 1 Marks
Question
Which of the following is the meaning of re-insurance?
A. The insurer insures the insurer’s assets
B. The insurer’s registration with the office of the Commissioner for Insurance
C. A reinsurance, effected by an insurer, on the same risk which was before insured, to indemnify the insurer
D. A new insurance with the government of the Federation
E. The insurer’s insurance with a foreign insurer
Answer
C. A reinsurance, effected by an insurer, on the same risk which was before insured, to indemnify the insurer
Explanation:
Re-insurance refers to an agreement in which an insurer transfers part of its risk to another insurance company. The main goal is to limit the insurer’s liability in case of significant claims.
- Tags: Insurance Contracts, Re-insurance, Risk Transfer
- Level: Level 1
- Topic: Agency Law
- Series: NOV 2012
- Uploader: Theophilus