What term describes an agreement that specifies terms and conditions between insurers?

What term describes an agreement that specifies terms and conditions between insurers?

• A. Contract
• B. Policy
• C. Treaty
• D. Guide

Answer: (C)

The term that best describes an agreement specifying terms and conditions between insurers is "treaty." In the context of the insurance industry, a treaty typically refers to a formal contract between two or more parties, especially in reinsurance arrangements, where the terms dictate the responsibilities of the insurers involved. Treaties are often comprehensive, detailing the coverage, payment structure, and any necessary legal stipulations, making them integral in the relationship between insurers and reinsurers. In contrast, while "contract" can generally describe any agreement, it does not specifically highlight the nuances found in insurance relationships. "Policy" usually refers to the document issued to a policyholder, detailing coverage of risks, which is different from the inter-insurer agreements themselves. "Guide" denotes a publication or document that advises but does not carry the binding nature of the agreements between insurance entities.

The term that best describes an agreement specifying terms and conditions between insurers is "treaty." In the context of the insurance industry, a treaty typically refers to a formal contract between two or more parties, especially in reinsurance arrangements, where the terms dictate the responsibilities of the insurers involved. Treaties are often comprehensive, detailing the coverage, payment structure, and any necessary legal stipulations, making them integral in the relationship between insurers and reinsurers.

In contrast, while "contract" can generally describe any agreement, it does not specifically highlight the nuances found in insurance relationships. "Policy" usually refers to the document issued to a policyholder, detailing coverage of risks, which is different from the inter-insurer agreements themselves. "Guide" denotes a publication or document that advises but does not carry the binding nature of the agreements between insurance entities.