Casualty Actuarial Society (CAS) Exam 6 Practice

Burden sharing in risk management questions centers on who bears the costs of flood risk—the insured and taxpayers. The option that asks whether a federal flood insurance program is an appropriate way to manage flood risk and whether it distributes the burden between the insured and the general public directly addresses this allocation: it’s about how costs and risks are spread across those who buy insurance versus the broader public who may fund deficits or subsidies. The other choices focus on whether the private market can underwrite flood risk, whether risk should be transferred to private markets or capital markets, or on debt forgiveness to the Treasury—topics that relate to market feasibility or fiscal actions, not the question of how burden is shared between insured individuals and the general public.