XYZ Insurance Company writes coverage for most perils which can damage

XYZ Insurance Company writes coverage for most perils which can damage property. XYZ, however, does not write flood insurance on property located in flood plains.

Which requirement of an ideally insurable risk might be violated if XYZ wrote flood insurance on property located in flood plains?
A) There must be a large number of similar exposure units.
B) The loss should not be catastrophic.
C) The chance of loss must be calculable.
D) The losses must be determinable and measurable.

ANSWER

Answer: B