In reinsurance, which term denotes the insurer that passes risk to a reinsurer, synonymously with the originating insurer?

In reinsurance, which term denotes the insurer that passes risk to a reinsurer, synonymously with the originating insurer?

• A. Reinsurer
• B. Policyholder
• C. Ceding Insurer
• D. Insured

Answer: (C)

In reinsurance, the insurer that passes risk to a reinsurer is the ceding insurer. This is the primary or originator of the policy that transfers part of its risk exposure to another company through a cession. The reinsurer is the entity that absorbs that risk, not the one issuing the policy. The policyholder is the person who owns the policy, and the insured is the person covered by the policy. So the term that describes the insurer that transfers risk is the ceding insurer (also called the ceding company).

In reinsurance, the insurer that passes risk to a reinsurer is the ceding insurer. This is the primary or originator of the policy that transfers part of its risk exposure to another company through a cession. The reinsurer is the entity that absorbs that risk, not the one issuing the policy. The policyholder is the person who owns the policy, and the insured is the person covered by the policy. So the term that describes the insurer that transfers risk is the ceding insurer (also called the ceding company).