The entity transferring the risk is called the ceding entity and the entity to which the risk is transferred is called the assuming entity.
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A. B.A
The statement "The entity transferring the risk is called the ceding entity and the entity to which the risk is transferred is called the assuming entity" is generally true.
In risk management and insurance, a ceding entity is a company that transfers some or all of its risk to another party, such as an insurance company, in exchange for payment of a premium. The ceding entity can be any entity that faces financial risk, such as a corporation, government agency, or individual.
The assuming entity, on the other hand, is the party that agrees to take on the risk from the ceding entity. This could be an insurance company, reinsurer, or another entity that is willing to assume the risk in exchange for payment of a premium or other compensation.
The transfer of risk from the ceding entity to the assuming entity is typically done through a contract or agreement, such as an insurance policy or reinsurance treaty. In these agreements, the ceding entity typically pays a premium to the assuming entity, who then assumes the financial risk associated with the event being insured.
In summary, the ceding entity is the entity that transfers the risk, and the assuming entity is the entity that takes on the risk. This process of transferring risk is an essential aspect of risk management and insurance, and understanding the roles of the ceding and assuming entities is critical for effective risk management.