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JAMB Commerce 1995 Question 28

Question 28

Insurance

The practice by which an insurance company accepts a very large risk and later shares it with other insurance companies is called

  1. A.subrogation
  2. B.contribution
  3. C.re-insurance
  4. D.indemnity.
Show the answer and explanation

Answer: C (re-insurance)

Explanation

Re-insurance is when an insurer passes part of a big risk to other insurers.