Exam (elaborations)
CA LIFE EXAM - PSI
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Exam of 15 pages for the course PSI Practice at PSI Practice (CA LIFE EXAM - PSI)
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A participating company is also referred to as which type of insurer? - CORRECTANSWER-Mutual insurer
An insurer owned by its policyholders, is called a - CORRECT ANSWER-Mutual
insurer
What is a participating life insurance policy? - CORRECT ANSWER-Contract that
allows the policyowner to receive a share of surplus in the form of policy
dividends
An insurer enter into a contract with a third-party to ensure itself against losses
from insurance policies it issues. What is this agreement called? - CORRECT
ANSWER-Reinsurance
John owns an insurance company that gives him the right to share and then sure
surplus. What kind of policy is this? - CORRECT ANSWER-Participating
Which of the following is not a characteristic of reinsurance? - CORRECT
ANSWER-Increases the unearned premium reserved
Which of the following is not a benefit of insurance? - CORRECT
ANSWER-Losses due to fraud are eliminated
When a mutual insurer becomes a stock company, the process is called -
CORRECT ANSWER-Demutualization
Which of the following is a contract that involves one party which indemnifies
another one a loss arises from an unknown event? - CORRECT
ANSWER-Insurance policy
Which of the following is an insurer established by a parent company's loss
exposure's? - CORRECT ANSWER-Captive insurers
Which of the following is not considered to be a definition for the term "loss"? -
CORRECT ANSWER-Probability that an event will occur
, Which of the following is not considered a definition of a risk? - CORRECT
ANSWER-The cause of loss
Which of the following best describes the statement; " the more times, and event
is repeated, the more predictable the outcome becomes"? - CORRECT
ANSWER-Law of large numbers
Which of the following would not be accomplished with the purchase of an
insurance policy? - CORRECT ANSWER-Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or
gain? - CORRECT ANSWER-Speculative risk
Which of the following is any situation that presents the possibility of a loss? -
CORRECT ANSWER-Loss
An insurer having a large number of similar exposure units is considered
important because: - CORRECT ANSWER-the greater the number insured, the
more accurately that is her can predict losses & set appropriate premiums
Which of these statements correctly describes risks? - CORRECT
ANSWER-Pure risk is the only insurable risk
Which type of risk is gambling? - CORRECT ANSWER-Speculative risk
Moral hazard is described as the: - CORRECT ANSWER-increased chance of a
loss because of an insured's dishonest tendencies
All of the following circumstances must be met for los retention to be an effective,
risk management technique, except - CORRECT ANSWER-Probability of loss is
unknown
All of the following circumstances must be met for lost attention to be an effective
risk management technique, except - CORRECT ANSWER-Probability of loss is
unknown
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