In a reinsurance arrangement, the insurer that receives risk from the ceding insurer is the?

In a reinsurance arrangement, the insurer that receives risk from the ceding insurer is the?

• A. Ceding Insurer
• B. Reinsurer
• C. Beneficiary
• D. Agent

Answer: (B)

In reinsurance, risk is passed from the primary (ceding) insurer to another insurer that agrees to take on part of that risk. The insurer that receives and agrees to cover that risk is the reinsurer, in exchange for a portion of the premium and the obligation to pay a share of losses as defined in the treaty. This arrangement lets the ceding company manage large exposures and maintain solvency while expanding its underwriting capacity. The other options don’t fit: the ceding insurer is the one transferring risk, not receiving; a beneficiary is the person who benefits from a policy, not the risk taker; an agent sells or places insurance and does not assume risk.

In reinsurance, risk is passed from the primary (ceding) insurer to another insurer that agrees to take on part of that risk. The insurer that receives and agrees to cover that risk is the reinsurer, in exchange for a portion of the premium and the obligation to pay a share of losses as defined in the treaty. This arrangement lets the ceding company manage large exposures and maintain solvency while expanding its underwriting capacity. The other options don’t fit: the ceding insurer is the one transferring risk, not receiving; a beneficiary is the person who benefits from a policy, not the risk taker; an agent sells or places insurance and does not assume risk.