RMIN 4000 uga test 1 Questions And Answers With Verified Solutions Graded A+
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Course
RMIN 4000 uga
Institution
RMIN 4000 Uga
4 types of hazards - Answer-1) physical hazard
2) moral hazard
3) attitudinal hazard
4) legal hazard
6 characteristics of an insurable risk - Answer-1) there must be a large number of exposure units
2) the loss must be accidental and unintentional
3) the loss must be determinable and measurab...
RMIN 4000 uga test 1 4 types of hazards - Answer -1) physical hazard 2) moral hazard 3) attitudinal hazard 4) legal hazard 6 characteristics of an insurable risk - Answer -1) there must be a large number of exposure units 2) the loss must be accidental and unintentional 3) the loss must be determinable and measurable 4) the loss should not be catastrophic 5) the chance of loss must be calculable 6) the premium must be economically feasible active retention - Answer -active risk retention means that an individual is consciously aware of the risk and deliberately plans to retain all or part of it. example: motorist may wish to retain the risk of a small collision loss by purchasing an auto insurance policy $500 or higher deductible actuary - Answer -rates and premiums are determined by this using company past loss experience and industry statistics adverse selection - Answer -the tendency of persons with a higher than average chance of loss to seek insurance at standard rates, which, if not controlled by underwriting results in higher than expected loss levels example: high risk drivers who purchase insurance at standard rates attitudinal hazard - Answer -carelessness or indifference to a loss, which increases the frequency or severity of a loss example: leaving car keys in an unlocked car, which increases the chance of theft, changing lanes on highway without blinker avoidance - Answer -example: avoid the risk of being mugged in a high crime area by staying away from high crime rate areas benefits of insurance to society - Answer --indemnification for loss -reduction of worry and fear -source of investment funds -loss prevention -enhancement of credit captive insurer - Answer -insurer owned by a parent firm for the purpose of insuring the parent firm's loss exposures -single parent captive -association or group captive is owned by several parents ceding company - Answer -primary insurer cession - Answer -amount of insurance ceded to the reinsurer chance of loss - Answer -the probability that an event will occur commercial risks - Answer --property risk -liability risk -loss of business income -cybersecurity and identity theft -human resource exposures
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