What Is the Fundamental Function of the Insurance Company-In Other

question 62

Multiple Choice

What is the fundamental function of the insurance company-in other words, what is it the insurance company does that makes the insurance mechanism work?

• A) It pools those insureds having similar risks, and predicts the losses that those in the pool will suffer.
• B) It pools any insureds who wish to purchase insurance, and attempts to predict the losses that those in the pool will suffer.
• C) It redistributes government subsidies to those who have suffered catastrophes.
• D) It eliminates the process of underwriting in order to sell insurance to as many people as possible, thus providing insureds with a huge quantity discount.

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Definitions:

Flame Retardant

A substance that is added to materials to make them resistant to catching fire.

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A form of cancer that occurs in the prostate, a gland in the male reproductive system, which can lead to significant health issues.

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Salts derived from hydrobromic acid, containing the bromide ion, used in medicinal preparations and various chemical syntheses.

Secondary Halide

A halogenated organic compound where the halogen atom is attached to a secondary carbon, which is bonded to two other carbon atoms.