Idaho Property and Casualty Practice Exam 2026 - Free Practice Questions and Study Guide

The reinsurance contract is best described as an agreement between Insurance Company C and the reinsurer because reinsurance is fundamentally a transaction between primary insurers (such as Insurance Company C) and reinsurers. In this case, the reinsurer provides additional financial protection to Insurance Company C by assuming some portion of the risk associated with Mr. R's Homeowners Policy. This arrangement allows Insurance Company C to manage its risk exposure while ensuring it can cover claims should they arise.

While there are parties involved in the overall insurance process, such as Mr. R and their agent, these relationships do not directly define the nature of the reinsurance agreement, which specifically concerns the contractual obligation between Insurance Company C and the reinsurer. Other options detail relationships or agreements that do not accurately represent the party structure or purpose behind reinsurance, which is primarily about financial stabilization and risk management for the insurance company itself.