Which of the Following Statements Is (Are)true Concerning the Self-Insured

question 30

Multiple Choice

Which of the following statements is (are) true concerning the self-insured retention (SIR) under a commercial umbrella liability policy?
I.The SIR applies to claims covered by the umbrella policy but not by any underlying insurance.
II.The SIR only applies to those claims for which the underlying policy has paid first,and the umbrella policy is paying on an excess basis.

• A)I only
• B)II only
• C)Both I and II
• D)Neither I nor II

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Definitions:

Consolidated Statement

Financial statements that aggregate the financial information of a parent company and its subsidiaries into one document.

Acquisition

The process of obtaining control of another company or business entity through purchase or merger.

Carrying Amount

The book value of an asset or liability on a company's financial statement, reflecting its accounting value rather than market value.

Investing Cash Flow

Cash inflows and outflows related to transactions involving the acquisition and disposal of long-term assets and investments not included in cash equivalents.