Question

In certain cases, there may arise situations, when substantial gross payments need to be made immediately in respect of risks which are retained marginally. What can be done to eliminate the strain arising from this aspect on invested funds?

a.

A cash loss stability facility is administered in all outward arrangements.

b.

A cash loss recovery facility is administered in all outward arrangements.

c.

Programme design is modified to destabilise cash flow

d.

Programme design is modified to achieve better liquidity management

Answer: (b).A cash loss recovery facility is administered in all outward arrangements. Explanation:Situations may arise when substantial gross payments need to be made immediately in respect of risks which are retained marginally. To eliminate the strain arising from this aspect on invested funds, a cash loss recovery facility is administered in all outward arrangements. This facility helps the insurer to keep their well-invested funds intact.

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Q. In certain cases, there may arise situations, when substantial gross payments need to be made immediately in respect of risks which are retained marginally. What can be done to...

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