Which of the following is a category of reinsurance contract?

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Multiple Choice

Which of the following is a category of reinsurance contract?

Reinsurance contracts are classified by two dimensions: whether they are treaty or facultative, and how losses are shared (pro rata versus excess of loss). The strongest match here is a facultative contract paired with a non-proportional, or excess of loss, structure. This combination identifies a distinct form of contract used for specific risks, highlighting a non-proportional approach to loss sharing. Treaties with pro rata or facultative with pro rata describe other common pairings, while catastrophe is more a type of coverage focus than a contract category. So the facultative excess of loss choice best fits the category concept being tested.

Reinsurance contracts are classified by two dimensions: whether they are treaty or facultative, and how losses are shared (pro rata versus excess of loss). The strongest match here is a facultative contract paired with a non-proportional, or excess of loss, structure. This combination identifies a distinct form of contract used for specific risks, highlighting a non-proportional approach to loss sharing. Treaties with pro rata or facultative with pro rata describe other common pairings, while catastrophe is more a type of coverage focus than a contract category. So the facultative excess of loss choice best fits the category concept being tested.

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