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Cross-subsidy in insurnae occurs in which situation

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A cross-subsidy in insurnae occurs in which situation? a. When different lines of insurance (e.g., auto and homeowner's) are priced so that those with higher administrative costs subsidize those with administrative costs. b. When each risk class pays a premium that's appropriate for their level of risk c. When buyers in different risk groups pay the same premium, so that lower-risk buyers subsidize the higher-risk buyers d. When insurance is designed to encourage a change in behavior of risky buyers.

Reference no: EM132261904

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