A Formal Program of Risk Retention for an Individual That

question 2

Multiple Choice

A formal program of risk retention for an individual that takes on the insurance company's role in order to cover the individual's risk is:

• A)Adverse selection.
• B)Formal fund.
• C)Risk transfer.
• D)Self-insurance.

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Definitions:

Deferred Tax Asset

A tax reduction amount that can be used to offset future tax liabilities.

Income Tax Rate

The fraction of income that individuals or businesses must pay as taxes.

Statutory Tax Rate

The tax rate prescribed by law that applies to income, sales, or other taxable activities.

Effective Tax Rate

The mean rate at which a person or company pays taxes, determined by dividing the total amount of tax paid by the taxable earnings.