Exam (elaborations)
CIP - C120 Underwriting Essentials
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- Captains Career Course Module 5 Post Test 2
CIP - C120 Underwriting Essentials
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Definition #1 - CORRECT ANSWER-An underwriter is an insurance professionalemployed to accept or reject risk on behalf of an insurer
Definition #2 - CORRECT ANSWER-An underwriter is an investor of shareholder
capital
Definition #3 - CORRECT ANSWER-An underwriter is an insurance professional
employed to implement an insurer's strategic plan
Complete Definition - CORRECT ANSWER-An underwriter is an insurance
professional who invests the capital of an insurer's shareholders by accepting or
rejecting risk to implement an insurer's strategic plan
Speculative Risk - CORRECT ANSWER-exists where there is a chance of either
gain or loss
CIP - C120 Underwriting Essentials
Pure Risk - CORRECT ANSWER-exists where there is only a chance of loss
Contract - CORRECT ANSWER-an agreement between legally capable parties
for a consideration demonstrating intent to do something which is legal
Consideration - CORRECT ANSWER-is money or a thing or act of value that one
party gives or promises in exchange for the act or promise of the other party; it is
the evidence that the parties intend to be bound by the contract
Insurable Interest - CORRECT ANSWER-exists when the insurance buyer
stands in such a legal relationship to the object of insurance as to be financially
benefited by its continued existence or financially prejudiced by its loss or
damage.
Indemnify - CORRECT ANSWER-to return someone after a loss to the same
financial position he or she enjoyed immediately before the loss
, Insurance Policy - CORRECT ANSWER-a document that provides evidence of a
contract of insurance. It states in detail the terms of the contract - that is, the
terms of the agreement between insurer and the insured.
Frequency of loss - CORRECT ANSWER-the ratio of the number of losses to the
number of exposure units
Severity of loss - CORRECT ANSWER-the average size of losses
Additional Insured - CORRECT ANSWER-any party not automatically included
as an insured but entitled to a certain degree of protection under the policy
Additional NAMED insured - CORRECT ANSWER-any party, other than the
original named insured, identified as an insured in the policy declarations. They
have more rights & responsibilities than an additional insured.
Mortgage - CORRECT ANSWER-when the security is real property
Chattel Morgtage - CORRECT ANSWER-when the security is personal property
Back dated policy - CORRECT ANSWER-a policy that will become effective
retroactively after the applicant applies for it
Expert Systems - CORRECT ANSWER-are computer software programs that
guide underwriters through a risk analysis, prompting them with questions and
directing them according to the answers generated by the facts of the risk.
Hazard - CORRECT ANSWER-a condition that may cause a peril to occur
Common Hazards - CORRECT ANSWER-are hazards that are generally found
in most occupancies
Special Hazards - CORRECT ANSWER-are hazards that uniquely characterize
certain occupancies
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