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    Question

    An arrangement between two insurance companies whereby

    one transfer is a part of risk to other company is called?
    A Reinsurance Correct Answer Incorrect Answer
    B Double insurance Correct Answer Incorrect Answer
    C Joint insurance Correct Answer Incorrect Answer
    D Group insurance Correct Answer Incorrect Answer
    E Third party insurance Correct Answer Incorrect Answer

    Solution

    The correct term for the described arrangement is "Reinsurance." It involves one insurance company (the ceding company) transferring a part of its risk to another insurance company (the reinsurer) in order to mitigate its overall risk exposure. This allows the ceding company to manage its liabilities more effectively.

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