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Which of the following statements about the use of a captive insurance company by a parent firm is true? The captive may not write outside,
Which of the following statements about the use of a captive insurance company by a parent firm is true?
The captive may not write outside, nonparent company, business.
Business placed with the captive is always considered retained risk and is never considered transferred
risk.
The captive may be used to insure loss exposures that the parent firm finds it difficult to insure with
private insurers.
Captives are not permitted to use reinsurance, so any business insured by the captive stays with the
captive.
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