Methods by Which Insurers May Minimize or Avoid Catastrophic Losses

question 21

Multiple Choice

Methods by which insurers may minimize or avoid catastrophic losses include which of the following?
I.The use of reinsurance
II.Concentrating coverage written in one geographic region

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

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Definitions:

Account Payable

Money owed by a company to its suppliers or creditors for goods or services received, considered a current liability on the balance sheet.

Creditor

An entity (could be a person, organization, government body) to whom money is owed by the debtor for providing a loan, goods, or services on credit.

Bank Memos

Notices from a bank that make adjustments to a company's bank account balance, often for fees, interest payments, or corrections.

Bank Reconciliation

The analysis that details the items responsible for the difference between the cash balance reported on the bank statement and the balance of the cash account in the ledger.