ABC Insurance Company entered into a reinsurance agreement with XYZ Re
ABC Insurance Company entered into a reinsurance agreement with XYZ Reinsurance.
Under the contract, XYZ Re has no liability unless ABC’s loss ratio exceeds 85 percent for the year. XYZ Re agreed to pay all losses in excess of the 85 percent loss ratio. ABC Insurance Company is using reinsurance to
A) stabilize profits.
B) reduce the unearned premium reserve.
C) provide large risk capacity.
D) retire from a line or territory.
ANSWER
Answer: A
Expert paper writers are just a few clicks away
Place an order in 3 easy steps. Takes less than 5 mins.