Identify the Incorrect Statement About Reinsurance

question 45

Multiple Choice

Identify the incorrect statement about reinsurance.

• A)It increases the financial stability of insurers by spreading risk.
• B)It facilitates direct assess of the original insured to the reinsurance company.
• C)It facilitates placing large or unusual exposures with one company.
• D)It helps small insurance companies stay in business, thus increasing competition in the industry.
• E)It increases the likelihood of the original insurer to be able to pay its claims.

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Definitions:

Solution Implementation

The process of executing a plan or strategy to solve a problem or address an issue effectively.

Decision Making

The cognitive process of selecting a course of action among several alternatives.

Alternatives Generation

The process of creating or identifying different options or strategies to achieve a particular goal or solve a problem.

Problem-Focused Coping

A coping strategy that involves directly managing or solving a stressful problem, aiming to change the situation that is causing stress.