For reinsurance assumed, the concepts analogous to __________ are referred to as attachment points and limits.
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A. B. C. D.D
For reinsurance assumed, the concepts analogous to attachment points and limits are referred to as retention levels.
Reinsurance is a risk management strategy used by insurance companies to transfer a portion of their risks to other insurers, known as reinsurers. When an insurance company assumes reinsurance, it means that they are accepting risks from another insurer, known as the ceding company.
The attachment point is a crucial concept in reinsurance. It represents the threshold or trigger point at which the reinsurer begins to assume liability for losses. In other words, it is the point at which the reinsurer's coverage starts. Below the attachment point, the ceding company retains the risk, meaning they are responsible for any losses. Above the attachment point, the reinsurer assumes the risk and will be responsible for covering losses.
Limits, on the other hand, refer to the maximum amount of coverage provided by the reinsurer. It represents the upper cap on the amount of losses that the reinsurer will cover. Once the total losses reach the limit, the reinsurer is no longer liable for any additional losses beyond that amount.
Therefore, in the context of reinsurance assumed, the concepts analogous to attachment points and limits are referred to as retention levels. The retention level is the point at which the reinsurer's liability begins (attachment point), and it also represents the maximum coverage provided by the reinsurer (limit).