Various Market Mechanisms, Such as Assigned Risk Pools and Reinsurance

question 1

Multiple Choice

Various market mechanisms, such as assigned risk pools and reinsurance facilities, allow employers that are considered uninsurable access to workers' compensation insurance.Employers with large losses, as depicted by high experience ratings, are considered high risk.These employers encounter difficulty in finding workers' compensation coverage.The way to obtain coverage is through these involuntary markets.Identify this market.

• A)Secondary market
• B)Complimentary market
• C)Primary market
• D)Sundry market
• E)Residual market

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Definitions:

Amortizing Discount

An Amortizing Discount is the process of spreading the amount of a bond's discount over its expected life, usually through regular charges to expense.

Bonds Outstanding Method

The bonds outstanding method is an approach to calculating interest expense on bonds payable that considers the total value of all bonds that have not yet been redeemed by the issuer.

Serial Bonds

Bonds that mature in installments over a period rather than having a single maturity date.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that serve as a global framework for preparing financial statements.