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    Question

    A type of reinsurance in which the re-insurer

    indemnifies the ceding company for losses that exceed a specified limit is called?
    A Catastrophe Reinsurance Correct Answer Incorrect Answer
    B Excess of Loss Reinsurance Correct Answer Incorrect Answer
    C Facultative Reinsurance Correct Answer Incorrect Answer
    D Treaty Reinsurance Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Excess of loss reinsurance is a type of reinsurance in which the reinsurer indemnifies the ceding company for losses that exceed a specified limit. Excess of loss reinsurance is a form of non-proportional reinsurance. Depending on the language of the contract, it can apply to either all loss events during the policy period or losses in aggregate. Treaties may also use bands of losses that are reduced with each claim.

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