Catastrophe Excess of Loss (or Catastrophie Excess of Loss per event) is a very effective means of risk mitigation against large single losses, such as a large bodily injury claim in a motor third party liability insurance.

a True

b False

Which of the following reinsurance represents effective risk mitigation against large catastrophe losses made up of the sum of potentially hundreds of relatively small losses created by the same cause?

a Surplus Reinsurance

b Quota Share Reinsurance

c Excess of Loss per Event Reinsurance

d Catastrophe Excess of Loss per Event

e Stop Loss Reinsurance

In this reinsurance arrangement, both the primary insurer and the reinsurer retain full decision-making powers with respect to each insurance contract. As each insurance contract is issued, the primary insurer decides whether or not to seek reinsurance, and the reinsurer retains the flexibility to accept or reject each application for reinsurance on a case-by-case basis. Identify this arrangement.

a Facultative arrangement

b Ceding arrangement

c Treaty arrangement

d Contingent arrangement

e Assumption arrangement