A functional reinsurance is that it
-
A.
protects the account of the insurer against large claims -
B.
discourage the spread of risk in the insurance market -
C.
provides protection for uninsured losses -
D.
encourages the insured to make claims from more than one insurer
Correct Answer: Option A
Explanation
Reinsurance is also known as insurance for insurers or stop-loss insurance.Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim.