True or False: Reinsurance alleviates the insurer's liability under the original policy.

Reinsurance is a mechanism that allows insurers to transfer a portion of their risk to another insurance company, known as the reinsurer. However, it is crucial to understand that reinsurance does not completely eliminate the insurer's liability under the original policy. Instead, it helps manage and distribute the risk associated with providing coverage.

When an insurer enters into a reinsurance agreement, it can reduce its overall exposure to large claims by sharing that risk with reinsurers. This means that while the reinsurer may take on some financial responsibility for certain claims, the primary insurer remains liable to the policyholder. If a loss occurs, the policyholder will still look to the original insurer for claim payments, and the reinsurer will only step in to cover the agreed-upon portion as specified in the reinsurance contract.

Consequently, the assertion that reinsurance alleviates the insurer's liability under the original policy is not accurate. The primary insurer still holds the ultimate responsibility to the insured, even after engaging in reinsurance agreements. This fundamental aspect of reinsurance supports the understanding that option B is the correct choice.