ECONOMICS
INSURANCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Lloyd’s of London
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Mutual Insurance Company
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Reciprocal Insurance Company
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Stock Insurance Company
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Risk Retention Group
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Detailed explanation-1: -Medical Professional Liability. Miscellaneous Professional Liability. Commercial General Liability. Commercial Auto Liability.
Detailed explanation-2: -There are two types of retention methods for containing losses as under: (i) Active Risk Retention: Where the risk is retained as part of deliberate management strategy after conscious evaluation of possible losses and causes. (ii) Passive Risk Retention: Where risk retention occurred through negligence.
Detailed explanation-3: -Examples of risks protected by RRG policies include medical and legal malpractice, however, property damage caused by a flood is not a covered risk. Policies can be owned by a group of individuals, such as a law firm, but they can also be purchased by public universities or county administrations.
Detailed explanation-4: -United Educators (UE) is one of the first and largest risk retention groups (RRGs) formed since Congress enacted the Liability Risk Retention Act (LRRA) in 1986.
Detailed explanation-5: -In most cases, the RRG needs only to complete a registration process in each state it wishes to do business in. By contrast, a captive insurance firm must be licensed in each state in which it does business or must use a fronting insurer to do business across state lines.