All of the Following Are Reasons for a Primary Insurer

question 36

Multiple Choice

All of the following are reasons for a primary insurer to use reinsurance EXCEPT

• A)to increase the unearned premium reserve.
• B)to increase underwriting capacity.
• C)to protect against catastrophic losses.
• D)to stabilize profits.

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Definitions:

Supernormal Growth Stock

Stocks of companies expected to experience higher than average growth rates in earnings or revenues in the future.

Preferred Stock

A type of stock that provides dividends before dividends are issued to common stockholders and typically does not come with voting rights.

Common Shareholders

Individuals or entities that own common shares in a corporation, granting them voting rights and a share in the company's profits through dividends.