Catastrophic Losses Are Not Insured by the Private Insurance Industry

Multiple Choice

Catastrophic losses are not insured by the private insurance industry because:

A) if a truly catastrophic loss occurs, it can threaten the solvency of the insurer
B) catastrophic losses can result from an individual's moral hazard
C) the federal government wants to insure catastrophic losses
D) the losses require foreign reinsurance companies to operate in the U.S.