Question

What is the analogy used by Dr. F.L. Tuma to describe the function of reinsurance?

a.

A shock absorber

b.

A communication channel

c.

A catalyst

d.

A technical restriction

Answer: (a).A shock absorber Explanation:Dr. F.L. Tuma described the function of reinsurance by drawing analogy with a shock absorber. Reinsurance helps the insurer to reduce, from the point of view of possible material losses, the perils which it has accepted.

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Q. What is the analogy used by Dr. F.L. Tuma to describe the function of reinsurance?

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