C11: Principles and Practice of Insurance Exams pack | Questions & 100% Correct Answers (Verified) | Latest Update | Grade A+

insurance : A contract which one party the insurer, for monetary consideration agrees to reimburse another, the insured, for loss or liability for a loss on a defined subject caused by specific hazards or perils. risk : The chance of loss. Specifically, the possible loss or destruction of pro...

Risk : The chance of loss. Specifically, the possible loss or destruction of property or the possible incurring of a liability. Types of Insurable Risk : 1) Personal Risks 2) Property Risks 3) Liability Risks Personal Risks : encompass the chance of loss arising from a person's own bodily ...

Intermediaries : -insurance agents -brokers Independent Agency System : a system of marketing insurance through independent contractors (agents) who sell insurance on a commission or fee basis with one of more insurers Independent Brokerage System : a system in which independent insurance p...

Risk : Uncertainty about an outcome, event might occur and it might not be favorable, the possibility of loss Differentiate between risk and chance : chance can have a good outcome whereas risk is always negative Peril : Event that gives rise to a loss. Beyond anyone's control. Examples are ...

True or False: A broker is an independent business person who places all business with one insurer. : False The subject of an insurance contract is ______. : Risk True or False? A peril is an event that may cause a loss to occur. : True A contract of insurance is between the insured and the ...

What is RATEMAKING? : - Process of establishing rates for each class of insurance. - Determining the cost of a specified unit of insurance for a given period of time. *(MNQ) What is RATE (unit cost)? : - The price of a unit of insurance for a period of one year. - Expressed in dollars and cents...

Different types of insurance providers : 1) Organizations operating for the profit of their owners 2) Co-operative organizations operating for the benefit of their members only 3) Government insurance organizations 4) Captive Insurers Unearned Premium Reserve : a reserve fund of an insurance c...

What are the components of risk? : Uncertainty Varying levels of risk Identify 3 general types of insurable risk that people are exposed to. : Personal Property Liability Which of the following statements is true about risk managers? : They determine what risks exist and what to do about th...

Explain how insurers get their products to the consumer through the independent agency and brokerage system, exclusive agency system and direct writing system (6) : Independent agency & brokerage -Large insurance companies appoint independent brokers to be their sales force and to bring client...

What are the 3 general types of risk? : PeoPLe are risk! Personal, Property, Liability What does "insurance" mean? : When something gets cRuMPLEd, Indemnify! Indemnification, Risk, Money, Perils, Loss, Exposure How does insurance provide security? : It WIIPs risks ***********! Worries, Inco...

Areas of regulation for Intermediaries : Q-ualifaction (must pass test) O-peration of business (must follow requirements) L- Icences - Must have license L- icence Renewal - Renewed annual The Categories of insurance: : 1) Social -Workers Compensation 2) Life and Health Life, accident and...

Two types of losses insurers face : -First party. -Third party. Who is responsible for proving the amount of loss? : it is the insured's responsibility, but if the insurer thinks the amount is out of line then they must prove it. Who reports a loss and to whom do they report it? : A loss ma...

Name & Define the 2 types of Losses an Insured can face? : First Party - A loss experienced by the insured. Involves the insured, the insurer & a lien holder/mortgagee. Third Party- (aka liability coverage) A loss by a person who is not a listed member on the policy. Who is responsible for pr...

Pure risk : Type of risk that can be insured Speculative risk : Risk example: Antoine's new barber shop Peril : Event leading to a loss Proximate cause of loss : Immediate cause of loss, e.g., malfunction leading to damage Earnings : Profit: revenue minus expenses Cost of risk 2 | P a g ...