NC Health Insurance Exam Pearson Vue Latest Graded A+
Pure Risk
chance of loss or no loss but not gain insurable
Speculative Risk
there is possibility of loss but of gain no insurablility
exposure unit
subject to loss
peril
cause of loss
life insurance
death
Health i...
NC Health Insurance Exam Pearson Vue
Latest Graded A+
Pure Risk
chance of loss or no loss but not gain insurable
Speculative Risk
there is possibility of loss but of gain no insurablility
exposure unit
subject to loss
peril
cause of loss
life insurance
death
Health insurance
accident and sickness
hazard
increases the likelihood or severity of loss
Three types of hazard
physical, moral, morale
physical hazard
arise from the inherent characteristic of the exposure unit
Moral Hazard
lifestyle of the insured person
Morale hazard
arise more from an outlook on life
risk avoidance
eliminating all risk altogether
risk retention
manage risk Deduction
self-insurance
instead of buying health insurance and saving $ in the bank
,Pure risk that are not insurable
Flood, War, Catastrophic losses
Intentional losses
not insurable
Adverse selection
bad for insurance
insurance actuary
a specially trained mathematician who calculates premiums
underwriter
checks out the medical history of the proposed insured and other factors to eliminate adverse
selection against the insurance company, issue policy premium restrictions
Days for applicant to requests an explanantion
90 days
Days insurance company must furnish an explanation
21 days
A dispute must begin within in
30 days
Law of Large numbers
the larger the number the easier it is to predict losses
how much $ must a insurance company have in reserve at all times
4 million
Reinsurance agreements
enable an insurance company the ceding company to transfer risk to the reinsurer (seller)
Capital Stock companies are owned by
stock holders and most common
Main purpose of the stock company
make a profit for its investors
Mutual companies are owned by
policy holders
, Assessment insurers
charge additional premiums at the end of the specified time period
Fraternal benefit societies are similar to
mutual companies
who is only eligible to buy insurance policies from a Fraternal?
its members
Fraternal agents can only sell which policies
life, health and annuity policies
self insurers
only insure themselves
Reciprocal exchanges
all its members to to insure each other
who manages a reciprocal?
attorney-in-fact
who often steps in to cover risks too large or too catastrophic for private insurers?
government insurers
Social Security
a federal program funded by employers, employees and the selfemployed
What agency does not fund social security?
FEderal Government
Insurers must be in a state to sell insurance
Authorized
What does Insurer get to sell in the insurance in a certain state?
Certificate of Authority
What are insurers classified as in their own state?
Domestic
What are insurers classified as in another state?
Foreign
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