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WGU C16 BUSINESS OF INSURANCE EXAM 2024 ACTUAL EXAM COMPLETE 250 QUESTIONS WITH DETAILED VERIFIED ANSWERS (100% CORRECT ANSWERS) /ALREADY GRADED A+$18.49
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WGU C16 BUSINESS OF INSURANCE
EXAM 2024 ACTUAL EXAM
COMPLETE 250 QUESTIONS WITH
DETAILED VERIFIED ANSWERS (100%
CORRECT ANSWERS) /ALREADY
GRADED A+
What is a bear market? - ....ANSWER...A bear market
is a market in decline. Share prices are dropping and
investors
believe the downward trend will continue. The fear
perpetrates the downward
trend.
When a bear market exists, the economy is sluggish
and unemployment rises.
What does the law of supply show? -
....ANSWER...Shows that the quantity of a product a
supplier will provide is relative to the
,amount of payment per unit he/she will receive.
The higher the price, the more the producer wants to
supply.
What does the law of demand state? -
....ANSWER...States that if all other factors remain
equal, fewer people will demand the product
as its price rises.
Conversely, the lower the price the more demand
there will be for the product.
What is the effect of mergers and acquisitions in the
insurance marketplace? - ....ANSWER...M&A tend to
increase capacity as larger companies with surplus
capital expand
their geographic score and product offerings.
Larger companies have greater resources than
smaller competitions to draw from
and put to use to compete for market share.
What THREE (3) imprudent underwriting practices
emerge in highly
competitive environments in soft market cycles? -
....ANSWER...1) Undercutting rates
,2) Relaxing policy terms and conditions
3) Neglecting loss prevention and control measures
Name THREE (3) strategies employed by
underwriters that signify a
hardening of the market. - ....ANSWER...Soft market
conditions arise when there is excess financial
capacity in the
marketplace and insurers demonstrate reasonable
profitability and strong capital
bases.
Hard markets follow poor results because risks
underwritten at artificially low
prices must eventually be offset with high enough
premiums. Companies tend to
react very slowly in a hardening market because
they do not want to be the first ot
move prices up and loose good accounts.
1) Approach each risk very cautiously before offering
to insure it
2) Set more exacting underwriting standards
3) Give loss control and loss prevention measures
significant consideration
, 4) Tighten policy terms to limit exposures
5) Mark substantial rate increases
6) Terminate relationship with brokers with
unprofitable results or with only a small
volume of business
7) Withdraw from the jurisdiction, a class of
business, or an individual risk when
sufficient market share has not been gained or a
portfolio or individual risk is not
profitable
8) Withdraw from the market altogether by selling
the company to another insurer or
placing it into what is known as a run-off (ceases to
write new business and only
services existing policies)
Social inflation - ....ANSWER...refers to the increases
in clais costs results from generous jury aways,
legislated benefit increases and changing legal
concepts of tort/negligence
What effect can an insolvent insurance company
have on the marketplace? - ....ANSWER...Shrinks the
market and its capacity due to fewer market players.
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