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RIBO Exam 1 Practice Questions
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RIBO Exam 1 Practice Questions
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RIBO Exam 1 Practice Questionsd) The law of large numbers always tells a good underwriter which specific risks will
have losses - ANS-Which of the following statements is not correct?
a) With pure risk there is a chance of loss but not a chance of profit
b) with speculative risk there is a chance of either loss and or profit
c) There are a number of ways to deal with the risk that are not insurance
d) The law of large numbers always tells a good underwriter which specific risks will
have losses
a) A peril is an event which may cause a loss to occur - ANS-Which of the following is
correct?
a) A peril is an event which may cause a loss to occur
b) A hazard can cause a loss to be less severe
c) An example of physical hazard is the obsolescence of plant and machinery
d) Moral hazard is easier to detect and correct than physical hazard
a) The premium or type of policy available - ANS-A material fact is one that could affect:
a) The premium or type of policy available
b) The term of the policy
c) The premium payment arrangements
d) The statutory conditions
b) Agreement, genuine intention, consideration, capacity to contract, legality of purpose.
- ANS-A contract is an agreement enforceable at law. Which one of the following
answers lists all the necessary requirements that must exist?
a) Agreement, genuine intention, utmost good faith
b) Agreement, genuine intention, consideration, capacity to contract, legality of purpose.
c) Agreement, considerations, capacity to contract, utmost good faith
d) Agreement, capacity to contract, utmost good faith
d) Put the insured back into the same financial position he was in at the time the loss
occurred. - ANS-In general when an insurance company indemnifies an insured it tries
to: (select the most correct)
a) Put the insured back into the same financial position he was when he purchased the
policy.
b) Put the insured back into the same financial position he was in when his values were
the highest.
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