An insurance that is purchased by an insurance company to remain solvent after major claims is known as

The correct answer is D. Reinsurance.

Reinsurance is a type of insurance that an insurance company purchases from another insurance company to protect itself from large losses. This is done to ensure that the insurance company can continue to pay out claims even if it experiences a major loss.

Reinsurance can be purchased for a variety of risks, including property damage, liability, and casualty. It can also be purchased for specific types of events, such as hurricanes or earthquakes.

Reinsurance can be a complex and expensive process, but it is an important tool for insurance companies to manage their risk.

Here is a brief explanation of each option:

• Option A: Insurance is a contract between an insurer and an insured in which the insurer agrees to pay the insured for losses that are incurred as a result of a covered event.
• Option B: Underinsurance is a situation in which the insured has not purchased enough insurance to cover the full amount of the potential loss.
• Option C: Max insurance is not a term that is used in the insurance industry.

I hope this helps!