ANZIIF Tier 1 Practice Exam

The correct answer, which refers to the type of contract that covers all claims first notified during the term of the reinsurance contract, is known as the "claims made basis of reinsurance." This framework is significant in the field of insurance and reinsurance because it specifies that coverage applies only when a claim is made (or notified) to the insurer during the policy term, regardless of when the event that triggered the claim actually occurred.

This is particularly important for reinsurance contracts as it helps insurers manage their liabilities and sets clear parameters around the duration of coverage. By including only those claims notified during the active period of the contract, the insurer can reduce uncertainty around future claims that could arise from past events.

Other options pertain to different concepts in the insurance field. For instance, a business pack typically refers to bundles of insurance products tailored for businesses, while the burden of proof relates to legal standards in making a case. A class of insurance refers to a category of insurance products rather than the specifics of how claims are managed under a contract. Understanding these distinctions reinforces the unique nature of the claims made basis, which is crucial for effective risk management in reinsurance agreements.

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