RMIN 4000 FINAL EXAM BUNDLE (COMPLETE PACKAGE)with Complete Solutions!

Traditional definition of risk - ANSWER-uncertainty Definition of risk - ANSWER-uncertainty about chance, timing, or amount of loss Chance of loss - ANSWER-the probability that an event will occur Objective risk - ANSWER-the relative variation of actual loss from expected loss Law of Lar...

Basic Parts of an Insurance Contract - ANSWER-1. Declarations 2. Definitions 3. Insuring agreement 4. Exclusions 5. Conditions 6. Miscellaneous provisions Declarations - ANSWER-statements that provide information about the particular property or activity to be insured definitions - ANSWER...

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 Pr...

exposures - ANSWER-things of value (assets) that could be lost perils - ANSWER-things that could happen to these assets risk management - ANSWER-what do you want to do to protect these assets and/or prevent/reduce losses risk of driving a car - ANSWER-exposure: car peril: car accident ris...

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...

5 types of employee benefits - ANSWER-1. Medical expenses 2. Loss of income due to disability 3. Loss of income due to death 4. Loss of income due to retirement 5. Loss of income due to unemployment Medical expenses - ANSWER--health insurance -FSAS/HSAS (pre-tax health savings account) -wor...

How long is an auto insurance policy? - ANSWER-usually 6 or 12 months Who writes auto insurance policies? - ANSWER-ISO What is ISO? - ANSWER-Insurance Services Office Five General Types of Coverage for Auto Insurance - ANSWER-1. Liability 2. Uninsured Motorist 3. Medical Payments 4. Dam...

Legal wrong - ANSWER-a violation of a person's legal rights, or a failure to perform a legal duty owed to a certain person or to society as a whole types of legal wrong - ANSWER-crime, breach of contract, tort Tort - ANSWER-a legal wrong for which the court allows a remedy in the form of mone...

Philidelphia judicial hellhole - ANSWER-Reputation for excessive verdicts and its "open door" policy to out of state Georgia judicial hellhole - ANSWER-Continue rise in nuclear verdicts, increasing role of third-party litigation financing, and premise liability. trial lawyers and jackpot verdic...

Major Types of Private Insurers - ANSWER-Stock Insurers Mutual Insurers Lloyds of London Stock Insurer - ANSWER--A corporation owned by stockholders. -Objective is to earn profits for the stockholders by increasing stock and paying dividends. (Progressive, Allstate, Metlife, etc.) Mutual...

Lannister Insurance Company insures 200,000 vehicles. In 2019, they paid a total of $136,000,000 in collision losses to the owners of 16,000 of those vehicles. What was Lannister's collision loss frequency in 2019? - ANSWER-0.08 (16k/200k) Lannister Insurance Company insures 200,000 vehicles. In...

Loss exposure - ANSWER-A situation or circumstance in which the loss is possible, regardless of whether a loss occurs A physical hazard - ANSWER-Dense fog that increases the chance of an automobile accident is an example of Subjective risk - ANSWER-Uncertainty based on a person's mental condi...

Frequency - ANSWER-How often does a loss occur? Frequency = Number of Losses / Number of Exposures Severity - ANSWER-How much does it cost when a loss does occur? Severity = Total Losses ($) / Number of Losses Moral Hazard - ANSWER-The presence of insurance changes the behavior of the insure...

Exposures - ANSWER-things of value (assets) that could be lost perils - ANSWER-things that could happen to these assets Risk management - ANSWER-what do you do to protect these assets and/or prevent/reduce losses? process that identifies loss exposures faced by an organization and selects ...

Frequency - ANSWER-How often does a loss occur? The number of losses (such as fire, theft, collision) that occur within a specified time period probability of a loss severity - ANSWER-How much does it cost when a loss does occur? The dollar amount of loss for a specific peril (fire, theft, col...

basic parts of an insurance contract - ANSWER-declarations, definitions, insuring agreement, exclusions, conditions, and miscellaneous provisions declarations - ANSWER-statements that provide information about the particular property or activity to be insured what does the declarations page us...

A combined ration grater than 1 (or 100 percent) means that an underwriting loss has occurred - ANSWER-Which of the following statements about the combined ratio is true? Because insurance contracts are conditional - ANSWER-Why can an insurer refuse to pay a claim if an insured fails to abide by ...

Cost Sharing in Health Insurance - ANSWER-• Copayments • Deductibles • Coinsurance • Out-of-Pocket Maximum Limits Copayment - ANSWER-A flat amount the insured must pay for certain benefits, such as an office visit or generic drug. Does not count towards annual deductible. Examples : ...

principle of indemnity - ANSWER-The insurer agrees to pay no more than the actual amount of the loss (prevent the insured from profiting from loss) replacement cost (RC) - ANSWER-the cost to replace property with an item of like kind and quality (similar workmanship and materials) (not the same a...

Types of Employee Benefits - ANSWER--medical expenses - loss of income due to... a) death b) disability c) unemployment d) retirement medical expenses - ANSWER--health insurance - FSAs/HSAs- pre tax health savings accounts -worker's comp loss of income due to death - ANSWER-(not ge...

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...

frequency - ANSWER-- how often does a loss occur? - the number of losses (such as fire, theft, collision) that occur within a specified time period. - probability of a loss ex) probability of a fire is 0.0071 per loss exposure per year severity - ANSWER-- how much does it cost when a loss d...