When a company reinsures its liability with another, then it ________ business.

Question

Question: When a company reinsures its liability with another, then it ________ business.

Options:

1.  Cession
2.  Cedes
3.  Ceding
4.  None

Answer 1

2. Cedes

When a company reinsures its liability with another, then it Cedes business.

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More information:

A ceding company is an insurance company that that transfers the insurance portfolio to a reinsurer.

When a company reinsures its liability with another company, a part or all of its liability is passed to a reinsurance company.