In: Finance
Which of the following allows reinsurance to address the problem of surplus drain? Ceding commissions Excess of loss reinsurance Waiver of commissions Waiver of premiums
Answer:
The correct answer is 'Excess of loss reinsurance'
Excess of loss reinsurance allow the reinsurer to compensate the ceding company for losses that exceed specified limit.
All the remaining options are irrelevant.