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Options
- A
The same policyholder is renewed under the same terms next year
- B
Risks are insured with multiple firms
- C
The same insurer offers coverage annually
-
Insurance companies transfer portions of their risk to others via agreements
Correct answer
Why this is the answer
Reinsurance involves insurers ceding parts of their risk exposure to other parties through contractual arrangements, thereby spreading risk and reducing potential large liabilities.
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