Question-21.5.1. Insurance is the quintessential risk transfer product. The customer pays premiums to the insurance company, who provides coverage by making a promise to pay (aka, the contingent payout) in the event of a covered loss. In addition to risk transfer, another key element of insurance is the pooling of the premium dollars: the insurance company is diversified with respect to the loss event type. Insurance is a legal contract and very broadly, the FRM categorizes insurance contracts as one of three types: life; property and casualty (P&C); or health insurance. (Although sub-categories of insurance dynamically emerge, to be sure!). In regard to the key risk types, each of the following statements is true EXCEPT which is false?