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    • Question

      What is the purpose of "reinsurance"?

      A To transfer some of the insurer's risk to another insurer Correct Answer Incorrect Answer
      B To increase the premium income for the insurer Correct Answer Incorrect Answer
      C To reduce the number of claims received by the insurer Correct Answer Incorrect Answer
      D To avoid paying claims Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      Reinsurance is a mechanism where insurers transfer a portion of their risk to other insurers (reinsurers) to protect themselves from large or catastrophic losses.

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