Question

What is the characteristic of premium payments in a Finite Risk program?

a.

Premiums are fixed for the entire policy duration

b.

Premiums are based on the insurer's experience

c.

Premiums are paid at the end of the policy period

d.

Premiums are returnable to the policyholder if no losses occur

Posted under IC85 Reinsurance Management

Answer: (d).Premiums are returnable to the policyholder if no losses occur Explanation:If a Finite Risk program runs loss-free during its multi-year term, the premiums paid by the policyholder are returnable with interest at the agreed rate for that period. This means that if no losses occur, the policyholder can receive a refund of the premiums.

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Q. What is the characteristic of premium payments in a Finite Risk program?
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