All of the following are disadvantages of noninsurance transfers ...

[Pineappleeh]

All of the following are disadvantages of noninsurance transfers EXCEPT
 
  A) The party to whom the potential loss is transferred may be unable to pay.
  B) The transfer may fail because the contract language is ambiguous.
  C) The only potential losses that can be transferred are those that are not commercially insurable.
  D) The noninsurance transfer may be costly.

Question 2

Which of the following statements about the use of a captive insurance company by a parent firm is true?
 
  A) The captive may not write outside, non-parent company, business.
  B) Captives are not permitted to use reinsurance, so any business insured by the captive stays with the captive.
  C) The captive may be used to insure loss exposures that the parent firm finds it difficult to insure with private insurers.
  D) Business placed with the captive is always considered retained risk and is never considered transferred risk.

[zacnyjessica]

Answer to Question 1

Answer: C

Answer to Question 2

Answer: C

[Pineappleeh]

Thank you

[zacnyjessica]

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