A company determines that it is prohibitively expensive to become compliant with new credit card regulations. Instead, the company decides to purchase insurance to cover the cost of any potential…

Risk transference involves shifting the financial burden of a potential loss to a third party, most commonly through purchasing insurance. By buying insurance to cover credit card regulation non-compliance losses, the company moves the financial liability to the insurance provider rather than bearing it internally.

Accepting the risk means the organization acknowledges the risk and chooses to deal with any consequences on its own without any mitigation or transfer mechanism, which is not the case here since insurance involves a third party.

Avoiding the risk would mean the company ceases the activity that creates the risk entirely, such as stopping credit card processing altogether, which is not what is described.

Mitigating the risk involves implementing controls or countermeasures to reduce the likelihood or impact of the risk, such as partially complying with regulations, not purchasing insurance to cover losses.