Silvercrest Insurance Company issues a liability policy to a local hardware store. To manage its financial exposure, Silvercrest transfers a portion of this risk to Zenith Reinsurance.
If the hardware store files a valid claim under this policy, which entity is directly responsible for paying the hardware store?
- Silvercrest Insurance Company, because the insurance contract remains solely between the primary insurer and the policyholder.Cevap
- BZenith Reinsurance, because assuming a portion of the risk transfers direct liability to the reinsurer.
- CBoth Silvercrest and Zenith, who will split the claim payment directly to the policyholder.
- DThe hardware store is required to retain the transferred portion of the risk because Silvercrest chose to avoid it.
Cevap
The primary insurer (Silvercrest Insurance Company) is solely responsible for paying the claim because the insurance contract is exclusively between them and the policyholder.
Reinsurance is an agreement solely between a primary insurer (the ceding company) and a reinsurer. The original policyholder is not a party to this agreement and has no legal rights against the reinsurer. Therefore, the primary insurer remains fully and directly responsible for paying the policyholder's covered claims. After paying the policyholder, the primary insurer is indemnified by the reinsurer.
Adım Adım Çözüm
Anahtar Kavram
Reinsurance Privity of Contract