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RMI Final exam practice test With Questions And 100% ALL SURE ANSWERS
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JACKLINERMI Final exam practice test With Questions And 100% ALL SURE ANSWERS
Terms in this set (108)
1. Reinsurance: A
a. utilizes the law of large numbers to increase
predictability.
b. leads to decreased availability of insurance to
consumers.
c. creates solvency problems for primary insurers.
d. is only available on an excess basi
Lloyd's of London operates based on the B
principles of Utmost Good Faith, which means
that:
a. syndicate underwriters do business only with
selected Lloyd's clients.
b. each broker must tell the underwriter the entire
truth about the exposure being insured.
c. Lloyd's of London pays any claim made by a
policyholder.
d. all names in a syndicate must approve each
exposure before it is insur
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,RMI Final exam practice test
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, - Generally we're Risk Averse
COMMON ASSUMPTIONS ABOUT DECISIONS - Decisions are improved with more info
- Decisions are consistent
The Rawson Insurance Company (which is C
licensed in Illinois) is considering providing
propertyinsurance coverage for the Willis Tower (a
high-valued, unique building in Chicago, Illinois),
but will doso only if it can successfully reinsure the
exposure. The Rawson Company probably would
reinsure thisparticular exposure through:
a. a treaty reinsurance contract
b. an association reinsurance contract
c. a facultative reinsurance contract
d. use of a captive insurer
Assume that Rawson (in the question above) sells A
a policy with a limit of $100 million on the
WillisTower. Further assume that Rawson
purchases $40 million excess of $30 million from
the StrongReinsurance Company and $30 million
excess of $70 million from the Even Stronger
ReinsuranceCompany. If a fire causes $45 million
in damage to the Willis Tower, how much will Even
Stronger beobligated to pay?
a. $0
b. $13.5 million
c. $15 million
d. $45 millio
Assume that Strong Reinsurance in the example A
above is insolvent and unable to pay. What then is
EvenStronger's responsibility?
a. $0
b. $13.5 million
c. $15 million
d. $45 million
RMI Final exam practice test
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