Which one of the following statements is correct regarding treaty reinsurance?
Choose one answer.
A. The integrity and experience of the primary insurer's management are generally not factors that treaty reinsurers consider.
B. If treaty reinsurance agreements permitted primary insurers to choose which loss exposures they ceded, the reinsurer would be exposed to adverse selection.
C. If reinsurers are comfortable with a primary insurer's published underwriting guidelines, they are generally not concerned with the degree to which those guidelines represent the insurer's actual practices.
D. Primary insurers usually make treaty reinsurance agreements so their underwriters have discretion in using that reinsurance.