Rmin 4000 test 2 - Study guides, Class notes & Summaries

Principle of Indemnity - ANSWER-The insurer agrees to pay no more than the actual amount of the loss (make you whole again, no gain). Purpose: -To prevent the insured from profiting from a loss -To reduce moral hazard Indemnification in property insurance is - ANSWER-based on the actual cash value (ACV) of the property at the time of loss 3 main methods to determine actual cash value: - ANSWER--Replacement cost less depreciation -Fair market value -Broad evidence rule There are ...

RMIN 4000 Test 2 Daniel Brown Questions & Answers

RMIN 4000 Test 2 Daniel Brown Questions with verified correct answers

Stock Insurer - correct answer Corporation owned by Stockholders (earn profit for stockholders by increasing the value of the stock and paying dividends). Mutual Insurer - correct answer Corporation owned by Policyholders (profits are distributed to policyholders by dividends or rate reductions). Advance Premium Mutual Assessment Mutual Fraternal Insurer Lloyd's of London - correct answer Specialized lines of business. Brokers - correct answer represent policyholders to arrang...

Principle of Indemnity - ANSWER-The insurer agrees to pay no more than the actual amount of the loss (make you whole again, no gain). Purpose: -To prevent the insured from profiting from a loss -To reduce moral hazard Indemnification in property insurance is - ANSWER-based on the actual cash value (ACV) of the property at the time of loss 3 main methods to determine actual cash value: - ANSWER--Replacement cost less depreciation -Fair market value -Broad evidence rule There are ...

Stock Insurer - ANSWER-Corporation owned by Stockholders (earn profit for stockholders by increasing the value of the stock and paying dividends). Mutual Insurer - ANSWER-Corporation owned by Policyholders (profits are distributed to policyholders by dividends or rate reductions). Advance Premium Mutual Assessment Mutual Fraternal Insurer Lloyd's of London - ANSWER-Specialized lines of business. Brokers - ANSWER-represent policyholders to arrange coverage with syndicates. Lega...

Prospective Loss Costs (Pure Premium) - Amount needed to pay future claims and loss adjustment expenses. Class (Manual) Rating: Frequency*Severity Lloyd's of London - Specialized lines of business. Brokers - represent policyholders to arrange coverage with syndicates. Legally represents insured. Syndicates - Offer insurance contracts in the market. Managing Agents - Manage the syndicates, who typically specialize in certain lines. Underwriters - Work for the syndicates to assess risks a...

Stock Insurer - ANSWER-Corporation owned by Stockholders (earn profit for stockholders by increasing the value of the stock and paying dividends). Mutual Insurer - ANSWER-Corporation owned by Policyholders (profits are distributed to policyholders by dividends or rate reductions). Advance Premium Mutual Assessment Mutual Fraternal Insurer Lloyd's of London - ANSWER-Specialized lines of business. Brokers - ANSWER-represent policyholders to arrange coverage with syndicates. Lega...

Gross Premium - ANSWER-Total premium charged per unit of coverage Risk Charge - ANSWER-Estimation of risk of the insurer. 3* SD/ per person Admin Costs - ANSWER-Money spent in daily operations of company. Ex. Salaries, overhead, marketing Expected Loss - ANSWER-Expected frequency * expected severity Fortuitous - ANSWER-Random, accidental, no control over E(F)/E(S) Underwriting - ANSWER-process of classifying a risk Risk based pricing - ANSWER-Higher the risk you are, the more t...