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:

Sole Proprietorship

A business owned and operated by a single individual, with no distinction between the business and the owner.

Unlimited Liability

A legal situation where business owners are personally responsible for all of the company's debts and liabilities.

Ownership Interest

A share or stake that an individual or entity holds in a company or property, indicating the extent of their rights to the profits and assets.

Partnership Agreement

A formal contract between two or more parties who agree to manage and operate a business together, outlining the responsibilities, profit share, and rules for the partnership.