Question

1. All of the following are insurable risks to an underwriter except which one?

	A.	A risk shared by many
	B.	A risk which is not catastrophic
	C.	A risk that is catastrophic
	D.	A fortuitous risk

2. The definition of retention is the external funds used to pay losses.

True

False

3. Insurance is a transfer of risk.

True

False

Answer 1

1. C. A risk that is catastrophic

All of the following are insurable risks to an underwriter except which A risk that is catastrophic.

2. False

Use of Internal Funds, the company pays for the losses themselves. A risk financing technique by which losses are retained by generating funds within the organization to pay for the losses. A firm or individual retains the exposure to loss.

3. True.

Insurance is a transfer of risk. insurance contract from one party, the insured, to another party, the insurer, who takes on the risk for a fee known as a premium.