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CISR - Elements of Risk Management Exam 2024 | CISR Elements of Risk Management Actual Exam Update Latest 2024 Question and Correct Answers Rated A+ $23.57
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CISR - Elements of Risk Management
Exam 2024 | CISR Elements of Risk
Management Actual Exam Update Latest
2024 Question and Correct Answers
Rated A+
Accident -ANSWER-An unexpected and unintentional event that tends
to result in damage or injury
Accounting Rate of Return (ARR) -ANSWER-A tool that measures the
percentage return of average annual cash flows on initial investment
Active Retention -ANSWER-A planned financing solution in which
internal funds can be used to pay losses
Avoidance -ANSWER-Precludes or discontinues an activity to avoid
the chance of loss, eliminating both positive and negative outcomes
Budgeted Retention -ANSWER-The portion of expected losses an
organization is willing and able to retain
Claim -ANSWER-A demand for payment or a company's obligation to
pay as result of a loss or occurrence
Contractual Transfer -ANSWER-The shift of responsibility of certain
liabilities to another party; includes exculpatory agreements, waivers
of subrogation, limit of liability clauses, and hold harmless agreements
Cost-Benefit Analysis -ANSWER-A measurement of total anticipated
benefits after costs are subtracted
Deductible Plan -ANSWER-A risk financing program in which an
insured elects to reimburse the insurer for losses up to a stated
amount
,Dividend Plan -ANSWER-A guaranteed cost plan that has dividend
options which return a portion of the premium when an insurer has
had an overall good year and the insured meets a certain loss ratio
criterion
Duplication -ANSWER-Establishing backups for critical systems or
operations
Economic Class of Risks -ANSWER-Risks arising from internal
operations, general economic conditions, external competition,
conditions in the financial marketplace, and entrepreneurial activities,
such as new products or services
Exculpatory Agreement -ANSWER-A pre-event exoneration of one
party for events that may result in any loss or a specified loss to
another party
Expected Losses -ANSWER-An estimate of total losses of a given
type that an insurance company can "expect" in a given period
Exposure -ANSWER-A situation, practice, or condition that may lead
to an insured's susceptibility to adverse financial consequences or
loss
External Financing -ANSWER-Insurance purchased to pay for losses
that fall outside an organization's risk appetite and ability
Frequency -ANSWER-The number of claims that occur, or an insurer
expects to occur, within a given period of time
Guaranteed Cost Plan -ANSWER-A finance plan for organizations that
have low risk appetites, desire little variability in cost of risk, and have
little or no ability to manage services. The rate is multiplied by the
exposure and is then adjusted by both the experience modifier and
any scheduled and/or discretionary credits/debits.
,Hazard -ANSWER-A factor that increases the likelihood a peril will
occur
Heat Mapping -ANSWER-A visual representation of complex sets of
data interpretations which uses colors to indicate patterns or
groupings of how risk will impact an organization
Hold Harmless Agreement -ANSWER-An arrangement whereby one
party assumes the liability inherent in a situation, thereby relieving
another party of that liability
Human Resources -ANSWER-An organization's internal people
exposure
Implementation -ANSWER-The part of Risk Administration in which a
desired risk management plan is initiated
Incident -ANSWER-An event that may lead to a loss or a claim, or
may cause a business interruption
Indemnification Agreement -ANSWER-Another name for a hold
harmless agreement
Indemnitee -ANSWER-The party in a hold harmless agreement that is
relieved of liability
Indemnitor -ANSWER-The party in a hold harmless agreement that
assumes liability
Insurable Risk -ANSWER-A risk an underwriter may perceive as
something that has little chance of occurring and low severity should it
occur. An insurable risk, from a risk manager's perspective, is an
exposure that is often subject to loss and can negatively affect an
organization.
Insurance -ANSWER-A promise of compensation for specified losses
in exchange for payment of premium
, Intangible Property -ANSWER-Property that has value but no physical
form
Juridical Class of Risks -ANSWER-Risks arising from decisions made
by judges and juries, or adverse trends in the legal climate
Legal Class of Risks -ANSWER-Risks inherent in compliance or
arising from common law and statutory liability
Likelihood -ANSWER-The chance that something will happen
Limit of Liability Clause -ANSWER-A pre-event limitation of the
amount, type, or method of calculation of damages available to one or
both parties to an agreement
Loss -ANSWER-A reduction in asset value
Loss Development -ANSWER-The process by which data are
adjusted to account for lag time to settle claims, recognize frequency
development, and index for inflation
Loss Development Factor (LDF) -ANSWER-A value used to adjust
(multiply) known claims to determine an anticipated value for claims
over a specific time period
Loss Projection -ANSWER-The use of historical loss data to predict
future risk frequency and severity; also called loss forecast
Loss Reduction -ANSWER-The process of adjusting historical losses
with factors such as inflation; this allows historical losses to be valued
in current dollar amounts
Loss Trending -ANSWER-An action taken to minimize the severity, or
budgetary impact, of an unprevented loss
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