Which of the following statements about external and internal loss-financing techniques is not correct? A) Self-insurance is a form of internal loss-financing. B) Risk retention is a form of internal loss-financing. C) Insurance is a form of external loss-financing. D) Captive insurance is a form of external loss-financing.

Question

Quizplus · Accepted Answer

Captive insurance is a form of internal loss-financing, rather than external loss-financing. Captive insurance involves creating a subsidiary company to provide insurance coverage for the parent company. This allows the parent company to retain control over its insurance program and potentially reduce costs. Thus, statement (D) is the incorrect statement. Choices (A), (B), and (C) are correct statements.

Which of the Following Statements About External and Internal Loss-Financing