A formal program of risk retention for an individual that takes on the insurance company's role in order to cover the individual's risk is:
A)Adverse selection.
B)Formal fund.
C)Risk transfer.
D)Self-insurance.

Question

Quizplus · Accepted Answer

The formal program of risk retention for an individual that takes on the insurance company's role in order to cover the individual's risk is called self-insurance. This means that the individual is setting aside funds to cover their potential losses instead of purchasing insurance from a third party. This is often done by businesses or individuals who believe that they have a greater ability to manage and cover their own risks than an insurance company does.

A Formal Program of Risk Retention for an Individual That