Life & Health Insurance Practice Exam

A group-owned liability insurer that focuses on product liability risk is accurately described as a risk retention group. These entities are formed by a group of businesses or individuals with similar liability exposures, allowing them to collectively pool resources to manage and insure those risks. The main advantage of a risk retention group is that it provides members with more control over their insurance costs and coverage, particularly for liabilities that might be difficult to insure through traditional markets.

Risk retention groups are specifically designed to provide liability coverage for their members, which typically includes product liability among other types of liability. This focus on product liability risk makes them particularly suitable for businesses that manufacture or sell products, as they can tailor their coverage to the unique needs and exposures of those products.

Self-insurers refer to entities that choose to retain their own risk rather than purchasing insurance, while stock insurance companies are publicly traded companies that provide various insurance products. Reciprocal insurers are more of a mutual type of insurance setup where members insure each other, often lacking the same focus on specific liability risks as a risk retention group.