FINN 3279 Poll Questions and Quizzes

All of the following perils are covered under the flood policy except:

- Coastal storm surge - Heavy rainfall - Mudflow Backup of sewers not directly caused by flooding (Correct)

Which policy or policies provide coverage resulting for Civil Disorder (Riot and Civil Commotion)?

- Homeowners Property - Automobile Physical Damage - Commercial Property - Business Income - All of the above (Correct)

In a renewal program cost analysis, variable premium options include all of the following except:

- high deductible - reinsurance - self insurance (NOT) - retro rating ????????????

All of the following are benefits of reinsurance except:

- reduces premiums paid by policy holder - provides surplus relief - stabilize annual losses - protected against CAT losses ??????????????

An insurance company employee who review and selects accounts that match the company risk appetite is a

- risk manager??????? - account manager (NOT)

All of the following programs are beneficial to an insured on a fixed cost insurance program in a hard market except:

- seeking proposals annually to reduce the premium - two year renewal term - insuring the property and liability commercial package and the commercial auto with the same company - 3 year renewal term (CORRECT ANSWER)

Aggregate annual Member Company Assessments, based on named storm event, are capped at:

1 billion

NCIUA maximum limit for combined residential building and personal property is:

1,050,000

Policyholder assessments (Catastrophe Recovery Charges) are based on a policy premium charge of:

10%

Maximum building/contents limits for flood insurance on a residence are:

250,000/100,000

NCIUA maximum limit for commercial property with 2 or more fire divisions is:

6 million

A business owner's decision to select a fixed cost or variable cost insurance renewal option depends on:

?????????

In the Loss Layer Analysis example, the option for the insured to increase the deductible from $25,000 to $50,000 in exchange for a $50,000 decrease in premium is:

????????????

Swiss Re provides a reinsurance treat for Company A in which Company A retains $500,000 on each policy subject to the treaty. This type of reinsurance program is:

????????????

Reinsurance Underwriters consider management, loss history and geographical spread of the primary insurer when underwriting this type of reinsurance.

?????????????

The reinsurer is bound by the rates charged by the primary insurer in this type of reinsurance.

?????????????

In the surplus lines market, an attorney with a history of malpractice falls into which category?

???????????????

This is paid by the reinsurance company to the primary insurer to reimburse the primary insurer for expenses.

???????????????

A trend in which the calendar year combined loss ratio consistently exceeds the accident year combined loss ratio indicates that:

????????????????

Which of the following would be covered by Business Income Insurance under the Commercial Property Policy:

A Law Firm is unable to open because the City Government issues an order that businesses within a one mile radius must close because of a natural gas explosion .

Export list

A list of coverages or classes of business that can be "exported" (written in the surplus lines market) without fulfilling the diligent search requirement.

Distressed risk

A risk characterized by unfavorable attributes that have made it unacceptable to admitted insurers

Unique risk

A risk that is so specialized or unusual that admitted insurers are unwilling to insure it.

High-capacity risk

A risk that requires high limits of insurance that may exceed the underwriting criteria of admitted insurers.

Surplus lines law

A state law that permits any producer with a surplus lines license issued by that state to procure insurance from an eligible surplus lines insurer if the applicant cannot obtain the desired type of insurance in the admitted market.

A term that refers to insurance companies chartered or licensed outside the US is?

Alien

Nonadmitted insurer

An insurer not authorized by the state insurance department to do business within that state.

Admitted insurer

An insurer to which a state insurance department has granted a license to do business within that state.

Facultative reinsurance is usually purchased to:

Cover exposures rarely written by primary insurance company

A list provided by the State Insurance Departed which included coverages or risks eligible for the Surplus Lines Market is:

Export List

Advantages of the Surplus Lines Market includes all of the following except:

Guarantee Fund in case of insurance company insolvency

Homeowner coverage written through NCIUA includes:

HO 2, 3, 4, 6, 8

Most severe hurricane in N.C. history, based on property damage, was:

Hazel

Which of the following is not a significant concern in employment practices liability insurance due to COVID?

Increased cyber risk as a result of more workers online

A surplus lines broker with underwriting and binding authority over multiple programs is a:

Managing General Agency (MGA)

A landmark law/court ruling which authorized State regulation of insurance is:

McCarran Ferguson Act

Telematics:

Monitors automobile driver behavior

What entity establishes and files the personal lines premium rates charged by the NCIUA?

NC Rate Bureau

First layer of NCIUA Risk Financing Tower is:

NCIUA Retained Earnings

A surplus lines license that specializes in a niche market is a:

Program Manager

An office created in NC and other states to monitor surplus lines activity and collection of surplus lines premium tax is:

Stamping Office

The party or entity with primary responsibility for collection of the insurance premium tax on policies written by non-admitted companies is the:

Surplus lines broker

Federal legislation that has ben discussed as a potential model for future Pandemic Loss of Business Income coverage is:

Terrorism Risk Insurance Act

Admitted market, or standard market

The distribution system consisting of admitted insurers and their producers.

Surplus lines market

The distribution system of surplus lines insurers and intermediaries that provides insurance on risks for which insurance is not available from admitted insurers.

Reinsurance

The transfer of insurance risk from one insurer to another through a contractual agreement under which one insurer (the reinsurer) agrees, in return for a reinsurance premium, to indemnify another insurer (the primary insurer) for some or all of the financial consequences of certain loss exposures covered by the primary's insurance policies.

In the surplus lines market Event Cancellation INsurance for the 2020 NCAA Basketball Tournament falls into which category?

Unique

A document created in each state that lists authorized non-admitted insurance companies is:

White List

The first step for a business owner in developing a successful risk reduction strategy is

a risk assessment including a review of prior losses

Which of the following is not covered under the Flood Policy?

additional living expense

An insured whose loss experience is adverse but improving indicates:

an efficient loss control program

All of the following exposures lead to liability claims except:

business income loss

The primary insurer ___________ business to the reinsurer.

cedes

In a negligence claim covered by insurance who is the plaintiff?

claimant

All of the following lines of insurance are experiencing a decrease in the rating exposure as a result the COVID pandemic except:

commercial auto

NCIUA exposures since 2015 have been:

declining

Purchase of reinsurance can enhance primary insurance company's financial stability by:

decreasing Net Premium Written to Surplus Ratio

A Disability Income Policy Elimination Period is similar to a(n)

deductible

Important Insurance Coverages for Youth Sports Organizations include all except:

disability income

A New Business venture that has no loss history falls into which category?

distressed

Which of the following is covered in the basement?

drywall

This type of reinsurance is underwritten on a case-by-case basis:

facultative

With this type of reinsurance, the primary insurer has no obligation to cede risk to a reinsurer.

facultative

A standard flood insurance policy automatically includes building and contents coverage

false

All homes in a SFHA in the U.S. must carry Flood Insurance?

false

Flood Insurance policy becomes effectively immediately after completing the application and paying the premium?

false

Flood is a covered peril under the Homeowners policy?

false

Individuals and families who do not have flood insurance will be eligible for federal grants to rebuild following a federally designated natural disaster?

false

Other long-tailed liability lines loss development factors are expected to continue to decrease over the next two years.

false

You must live in a Special Flood Hazard Area (SFHA) to be eligible for flood insurance?

false

Primary Flood risk is determined by :

flood map

The demand for surplus lines insurance increases during a:

hard market

A specialty coverage purchased by Nike is:

image protection

Social inflation leads to all of the following except:

increased speeding on highways

In a negligence claim covered by insurance who is the 2nd party?

insurer

The funding of plaintiffs by investors to pursue lawsuits is:

litigation financing

NCIUA provides insurance coverage in:

nc beach and coastal counties

Which type insurance company can sell policies not pre-approved by State Regulators?

non-admitted

Which of the following property items is not covered by Flood insurance?

outdoor furniture

Broadest definition of disability is:

own occupation

Another option discussed for providing Business Income insurance for a future Pandemic event is:

parametric triggered products

Primary expose base for liability insurance premiums is:

payroll

Residual Disability Income Rider provides:

percentage of disability income benefit if part time return to work

4. All of the following lines of insurance have increased long term aggregate exposure from COVID except:

personal auto

A subsidiary of Tokio Marine is :

philadelphia insurance

In order for a business income loss to be triggered, the insured business must experience a:

physical damage to property

N.C. Insurance Underwriting Association (NCIUA) Wind/Hail only coverage provides:

primary wind/hail coverage when the primary wind coverage is excluded

A downward trend in insurance company's investment income will:

probably cause an increase in premium rates if loss ratios are increasing

"Failure to thrive" is a concern in:

professional healthcare liability

Elevation certificate is required for:

property in high risk areas only

Named Storm Member Company assessments are based on:

residential and commercial market share in North Carolina

The largest line of insurance written by NCIUA based on policy count is :

residential property

Sadler Sports develops and retain clients primarily by offering:

risk management advise

An insurance market in which primary and reinsurance company rates decline and companies compete for new business is a

soft market

An option that limits the policy holder's retained loss amount on a per loss basis is:

specific excess

Professional sports teams that self insure Permanent Total Disability for key players need:

team stop loss insurance

What is a major advantage that reinsurers have over primary insurers?

they can spread their risks on a wider geographic basis

This type of reinsurance typically forms the foundation of a reinsurance program for insurers who need to cede a specific proportion of a class of business.

treaty

All Companies Charge the Same Rate for Primary Flood Insurance?

true

Business Income insurance claims were covered following the 09-11 terrorist attacks on the World Trade Center in NYC.

true

Flood is a Covered Peril Under the Auto Policy?

true

An insurance coverage originally created by the Surplus Lines Industry is:

umbrella liability