Loss Transfer means:
A) shifting the financial consequences of a loss to a third party
B) shifting the financial consequences of a loss to a self-insurance program
C) shifting the financial consequences of a loss to a well-diversified portfolio
D) shifting the financial consequences of a loss to more wealthy group of people

Question

Quizplus · Accepted Answer

Loss transfer refers to the process of shifting the financial consequences of a loss to a third party. This is typically done through insurance, where an individual or organization pays a premium to an insurance company to take on the risk of financial loss due to certain events. In the event of a loss, the insurance company will compensate the individual or organization for the covered damages or losses, effectively transferring the financial consequences of the loss to the insurance company.

Loss Transfer Means