All of the Following Are Methods That a Property and Liability

question 50

Multiple Choice

All of the following are methods that a property and liability insurance company can use to protect against catastrophic losses EXCEPT

• A)sale of catastrophe bonds.
• B)purchase of common stock.
• C)purchase of excess-of-loss reinsurance.
• D)quota share reinsurance with a low retention percentage.

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Definitions:

Securities Act

Refers to laws that regulate the issuance and trading of securities, such as stocks and bonds, to protect investors from fraud and ensure transparency in the financial markets.

Due Diligence Defense

A legal defense used in securities law where the accused party argues they conducted a comprehensive and reasonable investigation prior to an alleged wrongdoing.

Private Placement Exemption

A regulatory exception that allows companies to sell securities directly to a limited number of qualified investors without the need for a public offer.

SEC

The Securities and Exchange Commission, a U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry.