Which of the Following Statements About the Use of a Captive

question 46

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 finds it 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:

Chess Team

A group of individuals who compete together in chess tournaments, often representing a school, club, or country.

Diving Team

A group of divers, often affiliated with sports or professional activities, who train together and may perform synchronized diving routines or underwater tasks.

Collective Identification

The process through which individuals perceive themselves as belonging to a group, aligning with its values and goals.

Mutual Trust

A foundational element in relationships within organizations, signifying the confidence parties have in each other's integrity, character, and abilities.