Which of the Following Statements About the Use of a Captive

question 9

Multiple Choice

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 is finding difficult to insure with private insurers.
• D)Business placed with the captive is always considered retained risk and is never considered transferred risk.

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Definitions:

Sapwood

The outer, younger part of a tree's trunk or branch that is active in transporting water and minerals from the roots to the leaves.

Secondary Xylem

Plant tissue that transports water and nutrients upwards from the roots; it also provides structural support and is a major component of wood.

Water Potential

Free energy of water; the water potential of pure water is zero and that of solutions is a negative value. Differences in water potential are used to predict the direction of water movement (always from a region of less negative water potential to a region of more negative water potential).

Functional Secondary Xylem

The mature, functional part of xylem that contributes to water and mineral conduction in plants, as well as structural support.