Series 63 practice questionmediumContribution vs. Indemnification
Which of the following best distinguishes contribution from indemnification under the USA?
- AContribution allows partial recovery from other liable parties; indemnification involves full reimbursement✓ Correct answer
- BBoth allow full recovery from other liable parties
- CIndemnification is required under the USA; contribution is not
- DContribution is only available if the Administrator approves
Explanation
Why A — Contribution allows partial recovery from other liable parties; indemnification involves full reimbursement
Contribution is where each liable party pays their share, while indemnification involves one party reimbursing another for the full amount paid. The USA recognizes contribution, not mandatory indemnification.
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