Which of the following statements about reinsurance facilities for insuring high-risk drivers is (are)true?
I.Underwriting losses in the reinsurance facility are shared by all auto insurers in the state.
II.An insurer must accept all applicants for insurance,but the insurer has the option of placing high-risk drivers in the reinsurance pool.

Question

Quizplus · Accepted Answer

Both statements about reinsurance facilities for insuring high-risk drivers are true. Statement I is correct because underwriting losses in the reinsurance facility are indeed shared by all auto insurers in the state, spreading the risk and financial burden across the industry. Statement II is also correct because insurers must accept all applicants for insurance, but they have the option to place high-risk drivers in the reinsurance pool, allowing them to manage their risk exposure while still providing coverage.

Which of the Following Statements About Reinsurance Facilities for Insuring