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TARA- Transfer the risky activity

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › TARA- Transfer the risky activity

  • This topic has 1 reply, 2 voices, and was last updated 3 years ago by Ken Garrett.
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  • May 23, 2022 at 6:26 pm #656272
    Noah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    Sir under the TARA model I read somewhere that “transferring of risk is sharing of risk with another party”, however I don’t quite get this. Because I thought, when we transfer the risk to say insurer or outsource or license something (that is high on impact and low on probability ), essentially the entire risk burden is on them isn’t?

    Can you explain where my understanding is going astray?

    May 23, 2022 at 10:24 pm #656288
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10592
    • ☆☆☆☆☆

    Not if, for example, the insurance policy has an excess ie an amount that will not be paid by the insurer.

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