I. A captive can develop rates that accurately reflect the actual and expected losses of its insured(s) instead of relying upon the average rates developed by others. II. Traditional insurance arrangements often provide adequate credit when an organization assumes a high level of potential loss (i.e. the member company retains a greater portion of potential claims).

A. I is true; II is true

B. I is true; II is false

C. I is false; II is true

D. I is false: II is false