Identify the Correct Statement About Captive Insurance Company

question 38

Multiple Choice

Identify the correct statement about captive insurance company.

• A)Forming a captive insurer is an inexpensive undertaking.
• B)All captives sell coverage to nonaffiliated organizations.
• C)It is self-controlled and independent of its policyholder-parent.
• D)They are forms of self-insurance.
• E)Its formation does not require capital contribution.

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Definitions:

Customized Goods

Products that are tailored to meet the specific requirements or specifications of an individual customer.

Parol Evidence Rule

A legal rule that prevents the introduction of evidence outside the written contract that would alter or contradict its terms.

Integrated Contracts

Legal documents that combine all agreements and terms related to a particular deal or relationship into a single, comprehensive document.

Merger Clause

A provision in a contract stating that the agreement is the complete and final agreement between the parties, superseding all oral or written agreements made prior.