Question

What happens if the pools of risks and premium pools created by insurance companies are not sufficient to meet their liabilities towards paying claims?

a.

Insurers become more solvent

b.

The system of risk pooling and insurance may fail

c.

Premiums are increased for all insured individuals

d.

The insured individuals receive higher payouts

Answer: (b).The system of risk pooling and insurance may fail Explanation:If the pools of risks and premium pools created by insurance companies are not sufficient to meet their liabilities towards paying claims, the system of risk pooling and insurance may fail.

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Q. What happens if the pools of risks and premium pools created by insurance companies are not sufficient to meet their liabilities towards paying claims?

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