General insurance

Question 1

What is the rate at which accident, sickness, or disability will occur?

Answer 1

Morbidity

Question 2

What is the unintentional decrease in value of an asset due to a peril?

Answer 2

Loss

Question 3

What is risk pooling?

Answer 3

Spreading a risk over a large group of people by substituting a small cost

Question 4

What do we call the predicting of the approximate number of deaths or the likelihood of disability that will occur among a certain group duringa certain period called?

Answer 4

Law of Large Numbers

Question 5

What is the item insured in the policy?

Answer 5

exposure unit

Question 6

What is the uncertainty regarding financial loss?

Answer 6

RISK

Question 7

What is speculative risk?

Answer 7

Involves both the chances of a loss or gain

Question 8

What is the only risk that is insurable?

Answer 8

Pure Risks

Question 9

What is the condition of being prone to loss due to a hazard or uncertain event called?

Answer 9

Exposure

Question 10

What are the 3 basic types of hazards?

Answer 10

Physical, moral, morale

Question 11

What are the 6 elements that make pure risks insurable?

Answer 11

LOSS must be due to chance, definite and measurable, loss exposure to be insured must be large, randomly selected, loss must be predictable, cann be catostrophic

Question 12

What is the immediate specific event that causes a loss?

Answer 12

Peril

Question 13

What gives rise to a peril?

Answer 13

Hazard

Question 14

What is the total amount the insurer will pay for an insured risk?

Answer 14

Limit of liability

Question 15

What are the 5 options to handle risk?

Answer 15

Avoidance, reduction, retention, transferance, and sharing (ARRTS)

Question 16

What is a company that helps an insurance company transfer a portion of its risk?

Answer 16

Reinsurer

Question 17

What is the purpose of a stock company?

Answer 17

To make a profit for the stockholders

Question 18

What are the aspects of a mutual company?

Answer 18

Owned by policyholders who get dividends

Question 19

What is a dividend?

Answer 19

Refund of overpayment on premiums

Question 20

What is insurance that is offered through the individual market?

Answer 20

Private Insurance

Question 21

What is the entity that assumes the risk?

Answer 21

Insurer

Question 22

What are the 3 examples of rating services that demonstrate the financial strength and stability of insurance companies?

Answer 22

AM Best, Standard and Poor’s, and Moody&Fitch

Question 23

Who are people who sell, solicit, and negotiate insurance?

Answer 23

Producer

Question 24

What is it called when one illegally converts another person’s funds for own use?

Answer 24

embezzlement

Question 25

Who regulates the insurance industry?

Answer 25

States

Question 26

What is needed for a contract to be legally valid and binding?

Answer 26

Offer, acceptance, consideration, compentent parties, and a legal purpose

Question 27

Who is the person who has all the ownership rights under the policy?

Answer 27

Policyowner

Question 28

What are the rights and responsibilities of all parties of the contract?

Answer 28

Conditions

Question 29

What is it called whe nthe values exchanged are not equal?

Answer 29

Aleatory

Question 30

When only one parties prepares the contract it is called?

Answer 30

Adhesion

Question 31

What is the type of contract that only reimburses or pays the amount of the loss?

Answer 31

Indemnity

Question 32

What is called when information is guarenteed to be true?

Answer 32

Warranty

Question 33

What is it called when information is believed to be true?

Answer 33

Representation

Question 34

What is it calle when both parties are trusted to reveal relevant facts?

Answer 34

Upmost good faith

Question 35

What kind of contract pays a stated amount in the event of a loss?

Answer 35

Valued contracts

Question 36

who selects, classifies, and rates risk?

Answer 36

Underwriters

Question 37

What is defined as the possiblity of a loss occuring?

Answer 37

RISK

Question 38

What are the 5 other reports an underwriters could use in determining applicants insurability?

Answer 38

Medical Report, MIB, Special questionaire, inspection report, credit report

Question 39

Who is the person covered undre the policy?

Answer 39

Insured

Question 40

What is adverse selection?

Answer 40

Less than favorable risks to seek or continue insurance to a greater extent than people in good faith

Question 41

What is a policy issued for a group insurance?

Answer 41

Master contract

Question 42

How many employees must participate in a non-contributory plan?

Answer 42

100% of eligible employees