CAIB 2 - Chapter 2 Exam Questions With 100% Accurate Answers Graded A+ 2024
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Course
CAIB 2 - Chapter 2
Institution
CAIB 2 - Chapter 2
Supporting Business - CORRECT ANSWER-Existence of other insurance policies the applicant has with the same insurer
Accommodation Business - CORRECT ANSWER-Business which is marginal or substandard but which the insurer agrees to accept as a favour or accommodation to the broker
Adverse Select...
CAIB 2 - Chapter 2 Exam Questions With
100% Accurate Answers Graded A+ 2024
Supporting Business - CORRECT ANSWER-Existence of other insurance policies the
applicant has with the same insurer
Accommodation Business - CORRECT ANSWER-Business which is marginal or
substandard but which the insurer agrees to accept as a favour or accommodation to
the broker
Adverse Selection - CORRECT ANSWER-Occurs when the applicants for insurance are
largely those most likely to suffer a loss (ex: flood)
Hard Market - CORRECT ANSWER-Occurs when low profit margins force out some of
the competition resulting in a more disciplined underwriting approach where insureds
receive little or nothing in rate discounts
Soft Market - CORRECT ANSWER-Characterized by intense competition between
insurers resulting in low rates and broader coverages
Risk Classification - CORRECT ANSWER-Refers to the grouping or classifying of risks
according to the established criteria which, in large part, is based on their probability for
loss as a class
Detachment - CORRECT ANSWER-Refers to the proximity of the building insured or
containing the property insured to other commercially rated buildings
Moral Hazard - CORRECT ANSWER-Subjective characteristics of the applicant that
could cause a peril to occur (conditions indicating presence of moral hazard: a) financial
condition and b) associates and c) moral character)
Physical Hazard - CORRECT ANSWER-Conditions relating to the use of tangible
property which could cause a peril to occur (6 considerations: 1. type of building
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