What is applied to the sale of all or a block of an entity's insurance in force of another entity?
Click on the arrows to vote for the correct answer
A. B. C. D.B
The correct answer to this question is B. Portfolio Reinsurance.
Portfolio reinsurance, also known as assumption reinsurance or block reinsurance, is a type of reinsurance in which an insurer transfers the risk associated with a group of policies to another insurer. In this type of transaction, the reinsurer assumes the risk associated with the policies in exchange for a premium paid by the ceding insurer.
In the context of this question, an entity is looking to sell all or a block of its insurance policies in force to another entity. To do so, the entity may enter into a portfolio reinsurance transaction with another insurer. In this transaction, the acquiring insurer would assume the risk associated with the policies in exchange for a premium paid to the selling entity. This allows the selling entity to transfer the risk associated with the policies while still retaining ownership of the policies themselves.
The other answer choices are not correct:
A. Insurance impede: This term is not commonly used in the insurance industry, and does not relate to the transaction described in the question.
C. Poly-holder insurance: This term is not commonly used in the insurance industry, and does not relate to the transaction described in the question.
D. Syndicated insurance: This term typically refers to a group of insurers that jointly underwrite a risk, rather than a transaction involving the sale of insurance policies in force.