Consider the following details:
Contract A is signed on April 1, but significant insurance risk isn't transferred until May 1
Contract B is signed on April 1 with all significant insurance risks transferred. On May 1, the contract no longer has significant insurance risk present.
Contract C is signed on April 1 with significant insurance risks transferred. All the right of the contract expire on April 31.
-Using the above-mentioned information, which of the following contracts would be classified as insurance contracts on April 1?
A) Contracts A & B
B) Contracts B & C
C) Contracts A & C
D) All three contracts

Question

Quizplus · Accepted Answer

Contracts B and C are classified as insurance contracts on April 1 because they both have significant insurance risk transferred on that date. Contract A does not transfer significant insurance risk until May 1, so it would not be classified as an insurance contract on April 1.

Consider the Following Details