Self-insurance - Correct Answer instead of buying health insurance and saving $ in the
bank
Pure risk that are not insurable - Correct Answer Flood, War, Catastrophic losses
Intentional losses - Correct Answer not insurable
Adverse selection - Correct Answer bad for insurance
Insurance actuary - Correct Answer a specially trained mathematician who calculates
premiums
Underwriter - Correct Answer checks out the medical history of the proposed insured
and other factors to eliminate adverse selection against the insurance company, issue
policy premium restrictions
, Days for applicant to requests and explanation - Correct Answer 90 days
Day’s insurance company must furnish an explanation - Correct Answer 21 days
A dispute must begin within in - Correct Answer 30 days
Law of Large numbers - Correct Answer the larger the number the easier it is to predict
losses
How much $ must an insurance company have in reserve at all times - Correct Answer
4 million
Reinsurance agreements - Correct Answer enable an insurance company the ceding
company to transfer risk to the reinsurer (seller)
Capital Stock companies are owned by - Correct Answer stock holders and most
common
Main purpose of the stock company - Correct Answer make a profit for its investors
Mutual companies are owned by - Correct Answer policy holders
Assessment insurers - Correct Answer charge additional premiums at the end of the
specified time period
Fraternal benefit societies are similar to - Correct Answer mutual companies
Who is only eligible to buy insurance policies from a Fraternal? - Correct answer its
members
Fraternal agents can only sell which policies - Correct Answer life, health and annuity
policies
Self insurers - Correct Answer only insure themselves
Reciprocal exchanges - Correct Answer all its members to insure each other
Who manages a reciprocal? - Correct Answer attorney-in-fact
Who often steps in to cover risks too large or too catastrophic for private insurers? -
Correct Answer government insurers
Social Security - Correct Answer a federal program funded by employers, employees
and the self-employed
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