An insurer cannot escape the condition of insolvency by being able to provide for all its liabilities and reinsurance of all outstanding risks. True or False?

The statement is true because the condition of insolvency in the insurance context typically refers to an insurer's inability to meet its financial obligations when they are due. Simply having the ability to provide for all liabilities through reinsurance or other financial strategies does not negate the fundamental definition of insolvency. Insurers must not only have the resources to cover current and anticipated claims but also maintain sufficient reserves and surplus capital to operate effectively within regulatory standards.

Insolvency is primarily assessed based on the insurer's overall financial health and ability to meet all obligations, including those that may not yet be apparent but arise in the future. Thus, a company may appear solvent on paper if it can manage its liabilities, but if it cannot fulfill its obligations as they become due, it is considered insolvent. Insurers are under stringent regulatory oversight to ensure they remain solvent, and being able to cover debts through reinsurance doesn't exempt them from these standards.

This concept highlights the importance of robust financial management and sufficient capital reserves in the insurance industry to mitigate risks and ensure long-term stability, aligning with regulatory frameworks.