Question

Local pools are established to minimize the need for reinsurance outside of a specific market. What is the main purpose of these pools?

a.

To maximize profitability

b.

To provide support for high-risk perils

c.

To handle undesirable or hazardous business

d.

To compete with leading reinsurance organizations

Answer: (c).To handle undesirable or hazardous business Explanation:Local pools are established to fill a specific need, particularly for business that may be too undesirable or hazardous for the market to handle in a normal competitive way.

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Q. Local pools are established to minimize the need for reinsurance outside of a specific market. What is the main purpose of these pools?

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