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April 2011: Q4 (ii)

J

jensen

Member
Hi

Why is there no marks for "because there is no reinsurance cover"? Isn't this a practical consideration for having exclusions in insurance contracts?

Thanks.
 
Hi Jensen,

Firstly, try to take a step back and consider what the examiners are asking for in a question. In this case, the examiners were asking "what are the advantages or exclusions?", and the answer could therefore be broadly structured around "exclusions help to limit risk, by ..."

Therefore, these advantages would apply whether or not there was reinsurance place.

Secondly, I would consider it very unlikely that there is no reinsurance cover.

Kind regards,

Katherine.
 
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