Alison's "Risk Management: Insuring Against Risk" Course
What is the name of the process of classifying prospective insured people, into the appropriate risk category, in order to charge the correct premium? Type the answer number into the box below.
2) Underwriting
Which type of modeling comprises mathematical equations and analysis and helps to predict future occurrences of natural and man-made disasters, that produces large and severe losses?
Catastrophe (Cat) Modeling
True or False - Agents represent the insured and place policies with appropriate insurers.
False
The risk of becoming ill and not being able to pay for medical care
Health insurance
What name is given to a form of self-insurance, where members of the same industry (e.g. airlines), create mutually inclusive contracts, designed to cover losses, for example: people and property in times of war?
Risk-retention group
True or False - Insurance contracts are contracts of "adhesion", because the insured must accept the terms as stipulated.
True
Fill in the blank - The three main types of insurance are: personal, group and ___________ .
commercial
Fill in the blank - Insurance contracts are contracts of __________ (the insurer will pay no more or no less than the actual loss incurred).
indemnity
Complete the sentence by choosing the correct option from below: provider | producer | commissioner In many US states, ________ is another name for insurance agents and brokers.
producer
Which tool is used by insurers, to determine the feasibility of coverage and the premium rates to set?
Cost-benefit analysis
Fill in the blank - Treaty and facultative __________ arrangements may be proportional or nonproportional.
reinsurance
Which types of government-mandated insurance, are obligatory in most U.S. states? Choose two:
1) Automobile liability 2) Social Security
Applicants for life and health insurance, often have to complete detailed questionnaires about what? Choose five options:
1) Medical status of close family members 2) Lifestyle 3) Smoking and drinking habits 4) Diet/exercise 5) Medical status
A risk that is perfectly suited for insurance, would meet which of the following requirements? Choose three:
1) The probability distribution of losses can be determined. 2) The losses that occur are accidental and definite. 3) The cost of coverage is economically feasible.
"The transfer of risk to insurers, lowers the risk to society as a whole." This rule is referred to as what? Type the answer number into the box below. 1. The law of diminishing returns 2. The law of gravity 3. The law of large numbers
3
In return for accepting a risk and promising to pay compensation to the insured, if a loss occurs, the insurer receives what kind of payment?
A premium
Actuarial analysis deals with the financial and risk aspects of insurance, taking past losses and projecting them into the future, to determine the financial reserves insurers need and which rates to charge. What is the name given to the professional who performs these tasks?
Actuary
Modern insurance brokerage firms provide a variety of related services, including which of the following:
All of these
The risk of income loss as a result of injury and not being able to work
Disability insurance
Complete the sentence by choosing the correct option from below: insured | victim | insurer Insurance agents and brokers are compensated by the _______.
Insurer
The risk of dying prematurely
Life insurance
What is the name of the curve that illustrates the relationship between age and the probability of death, that is used by actuaries to calculate risk exposures and set life insurance rates?
Mortality
Which type of insurance covers losses of property, caused by perils such as fire and theft and includes coverage for being held liable to pay damages to another person?
Property/causality
Complete the sentence by choosing the correct option: ___________ is an arrangement by which an insurance company transfers all or a portion of its risk under a contract of insurance, to another company.
Reinsurance
Independent insurance agents usually contact their customers before the date when their policy is due for renewal. What is the date of renewal often referred to as?
The "x-date"
TRUE OR FALSE? Claims adjusting/adjustment is the process of paying the insured, after they sustain a loss. The 'claims adjuster' is the person who represents the insurer, when the policyholder presents a claim for payment.
True
TRUE OR FALSE? For insurance to be economically feasible for the insured, the size of the possible loss must be significant and the cost of insurance must be small, compared to the potential loss.
True
True or False - There is a necessity for discrimination in order to create the correct insurance "pools".
True
FILL-IN-THE-BLANK: Risk pooling creates a large sample of risk exposures, so that the possibility of missing future loss predictions gets lower. This is the law of large numbers. Risk ________, from the owner of the risk (insured) to a third party (insurer), physically reduces the risk, both in number and in the anxiety it causes.
transfer
Why are catastrophes such as hurricanes and floods, often not covered by insurance contracts?
Because it is not always possible to predict the extent of loss
