Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

IF 1 Insurance , Legal And Regulatory > Ch : 01 Risk And Insurance > Flashcards

Ch : 01 Risk And Insurance Flashcards

(103 cards)

Start Studying
1
Q

In personal sense we all take decisions based upon

A

An assessment of risk which is carried out informally

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Informality ( assessment of risk ) may be acceptable in

A

Low risk situations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is risk management

A

Risk measurement and the means of attempting to deal with the risks we face are collectively termed as risk management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Definition of risk

A

1.the possibility of an unfortunate occurrence
2.doubt concerning the outcome of a situation
3.unpredictability
4.possibility of loss
5.the chance of gain ( investment strategy and gamble )

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a means of transferring the risk

A

Insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Risk transfer mechanism means

A

The accepting of an unknown future potential risk by an insurer for an agreed premium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Some people are willing to carry certain risks themselves are termed as

A

Risk seeking

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Feeling happier minimising the risk they ate exposed by taking insurance they ate called

A

Risk averse

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Term which describes an individual who is keen to remove risk where possible

A

Risk -averse

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

AIRMIC

A

Association of Insurance and Risk Managers in Industry and Commerce

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Which organisation has been influential is setting standards in areas of risk management

A

AIRMIC ( Association of Insurance and Risk Managers in Industry and Commerce)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the focus of good risk management

A

Identification and treatment of defined risks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

It gives shareholders a greater degree of confidence in a cos ability to manage its risks

A

Commercial risk management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Reduces potential for loss and managing hazards

A

Commercial risk management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Commercial risk management provides

A

A disciplined approach to quantifying the risks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

3 steps in the risk management process

A

Risk identification
Risk analysis and
Risk control

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

For which type of risks an issuer may become involved in helping to identify existing and potential risks through carrying out a physical examination or survey

A

Conventional risks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Which step of risk management is the most effective but may b costly or impractical

A

Risk control

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Aspects of controlling of risks

A

Physical control measures
Financial control measures
Developing a good risk culture

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Internal controls

A

Detective controls
Corrective controls
Preventative controls

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Insurers often assist which type of policyholders in the area of loss prevention and control

A

Commercial policyholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Who also play a role in relation to risk control when they provide reports following the survey

A

Insurers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Who will examine past data to evaluate or analyse the risk

A

Risk Managers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Under risk control which is the most effective but may be costly or impractical

A

Elimination

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Who has been central to development of research that supports the management of cyber risks and further developing security capabilities at a national level
The National cyber security centre
26
FPA
Fire protection Association
27
Most insurers rely on which centre for testing vehicle safety and security systems and for testing seats for whiplash protection
Thatcham Research Centre
28
MIAFTR
Motor insurance anti fraud and theft register
29
Which co was formed to combat increasing no of fraudulent claims
MIAFTR was formed through the participation of Association of British Insurers (ABI) members cos
30
Who help the insurers to develop crime and loss control solutions
Loss prevention research Council
31
Components of risk
Uncertainty Level of risk Peril and hazard
32
Level of risk is assessed by insurers in terms of
Frequency and severity
33
E.g of high frequency and low severity
Dented bumpers, cracked windscreen
34
E.g low frequency and high severity
Aircraft accidents and oil spillages
35
High frequency / low severity claims is is based on
Law of large numbers
36
Relationship between frequency and severity is
Inverse
37
What is peril
A peril can be defined as that which gives rose to a loss
38
What is hazard
Which influences the operation or effect of the peril
39
Examples of peril
Fire, lightning , collision , dishonesty
40
What is physical hazard relates to
Charatecteristics of the risk
41
Moral hazard arises from the
Attitude and behaviour of people
42
Age of the proposer and type of car for motor insurance is which hazard
Physical hazard
43
Construction of the property falls under which hazard
Physical hazard
44
Eg of poor Moral hazard
Poor claim history Serious motoring convictions Dishonesty Carelessness Social attitudes Eg.relaxed attitude to the speed limit as a driver Factors such as poor security in place or inadequate operation controls .A lax corporate attitude to security
45
Insurable risks can be grouped as
Financial risks Pure risks Particular risks
46
What is benefit policies
Policies are taken out in order to provide pre agreed amounts in the event of an accident or sickness
47
What is pure risks
Are those where there is the possibility of a loss but not of gain and where the best cab achieve in a break even situation
48
Particular risks
Are localised or even personal in their cause and effect
49
Features of insurable risks
The event insured against mustvbe fortuitous Insurable interest Must not be against public policy
50
Non fortuitous loss
Is a policuhokder who delebrates damages their car..not all the elements of loss or damage may b fortuitous
51
Homogeneous exposures
Given a sufficient number of exposure to similar risks..also they use law of large numbers
52
Ininsurable risks
Non financial Speculative Fundamental
53
Eg of non financial risks
Choosing a new house Deciding on a school for a child Loss of enjoyment of a holiday
54
Non financial risks
Is one where the outcome is not measurable in monetary terms
55
Which risk is often referred as business risk
Speculative risks
56
Speculative risk outcomes
Loss, break -even or gain
57
Fundamental risks
Are those which arise from a cause outside the control of any one individual or group individuals and their effects are usually widespread
58
E.g of fundamental risks
Loss relates social. Economic, political and natural cause Economic recession War Earthquake Famine
59
Benefits of insurance
In addition to peace of mind and the enabling of risk transfer Improved cash flow Expansion of business Loss control Premium invested Social benefits
60
Money is held until claims have to be paid
This creates a premium reserve
61
Pooling of risks
The losses of the few are met by the contributions of the many
62
When it enables the insurer to predict the final cost of claims in any one year
Applying law of large numbers
63
Equitable premium
Fair contribution to the pool
64
Task of an underwriter when considering individual risk
Correct assessment will ensure fair premium is charged and a fair profit can be made
65
A small fixed sum retained by the insured is called as
Excess
66
A large fixed sum tends to be called as
Deductible
67
2 or more policies in force which cover the same risk
Dual insurance
68
Self insurance
Means that an individual or Co has decided not ro use insurance as the risk transfer mechanism but to carry themselves
69
A co decides to self insure the first £100,000 of each property loss that it suffers .This amt is called
Retention
70
Types of motor insurance
Motor insurance Motorcycle insurance Commercial motor insurance Motor trade insurance
71
Under which insurance valuables and personal effects are covered as is public liability cover
Home insurance
72
Pet insurance is primary designed to cover
Vet costs of a pet is ill, gets injured or has an accident
73
Types of heath insurance
Personal accident Sickness Pvt medical insurance Short term income protection Critical illness
74
What is designed to cover monthly loan and credit card payments
PPI ( payment protection insurance)
75
Under which insurance payment is made directly to the insured creditors rather than the insured
PPI ( payment protection insurance)
76
Under FCA rules, which policies cannot bow be sold as single premium contracts
PPI ( payment protection insurance )
77
Pecuniary insurance covers
Intangible such as income, revenue or value Eg : FG , legal expenses, credit, business interruption,political risks and GAP ( guaranteed asset protection )
78
Marine insurance covers 3 main areas of risk
Physical damage to the ship or goods (cargo) Liabilities incurred to other parties Loss of income
79
Marine freight insurance covers
The sum paid for transportong goods or vessel hire
80
Marine Hull insurances covers
Damage to the ship. Its machinery and equipment and some limited liability insurance in case of contact with other vessels
81
Specialist covers are
Aviation products Personal accident policies for aircrew
82
Aviation insurances covers
Damage to aircraft ( hull) and legal liability to TP and passengers (liability)
83
What is a specialist branch of aviation insurance
Satellite insurance
84
Which insurance policy is one that brings together a number of different types of cover or a range of risks/ perils under one policy
Combined or packaged policies
85
The policy is really a shell into which different covers may b placed
Commercial combined
86
For a risk to be insurable it must be
Financial , pure and particular
87
Homogenous exposures are
Similar risks which help to determine a pattern
88
Rohan is starting a mobile bicycle repair business .he is concerned about the threat of the local competition .he should be aware that this is not insurable as its a
Speculative risk
89
An intruder alarm in a workshop is an example of
Physical control measure
90
The pool of insurance premium must be large enough to meet the losses in any1 year plus the
Cost of operating the pool and element of profit
91
Income protection provides
Fixed benefits in the event of an accident , illness or loss of job
92
If a motor insurance policy requires the car to ne kept in a garage at night ..this is an example of
Control risk
93
Where an insurance policy is arranged on a collective basis , the insured needs to be aware of
Each insurer is separately liable to the insured fpr their proportion of any claim that become payable
94
The ability of underwriters to be able to quote an appropriate premium is based on the concept of
Homogeneous exposures
95
When insurance is written on a co insurance basis with more than one insurer ,each insurer
Will pay a proportion of any claim, usually to the lead office
96
A business has property insurance of 1 million .If they choose to cover the 1st 250k from.their own resources is known as the insurers retention
97
Insurers typically accumulate money due to the delay between premiums being collected and when claims are made .what is this knwn as
Premium reserve
98
List of commercial property insurance
Perils and all risks policies Engineering/ breakdown Glass Livestock Money
99
Examples of particular risks
A factory fire A car collision Theft of personal possession from a home
100
Examples of fundamental risks
Economic recession War Earthquake Famine
101
Examples of peril
Explosion Lightning Collision Dishonesty
102
Examples of financial risks
Accidentally damage to a motor car Theft of property Loss of business profits following a fire Legal liability to pay compensation for personal injury to others
103
What is money insurance
Is on all risks basis,covering all risks of loss or destruction of or damage to money in transit on the insured premises during business hours

IF 1 Insurance , Legal And Regulatory (13 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions