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CRM Control of Risk questions with answers.
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CRM Control of Risk questions withanswers.
Risk ANS -Uncertainty concerning a loss arising out of a given set of circumstances
Types of Risk ANS -Pure and Speculative
List the 6 general classes of risk ANS -Economic, Legal, Political, Social, Physical, and Juridical
Risk Management ANS -The process of protecting an organization's assets through exposure
identification, exposure analysis, controlling exposures, financing losses with external and internal
funds, and the implementation and monitoring of the risk management process.
5 Steps in the Risk Management Process (Acronym) ANS -I A C F A
5 Steps in the Risk Management Process ANS -Identification, Analysis, Control, Financing, Administration
Cost of Risk (acronym) ANS -RRIIO
Cost of Risk ANS -+ retained losses (passive/active)
+ risk management departmental costs (salaries, training, expenses, employee costs, mgmt overhead)
+ insurance costs
+ indirect costs
+ outside services fees (outside consultants, third party administrators)
Objectives of the risk manager ANS -To minimize the cost of risk by identifying those factors from each
component that can be more effectively controlled
, Basic tenets of risk management ANS -A. Don't retain more than you can afford to lose
B. Don't risk a lot for a little
D. Don't treat insurance as a substitute for risk control
C. Consider the likelihood of events and their potential impact
E. Remember, there is no such thing as an uninsured loss; an uninsured loss is a retained loss
F. Use at least one risk control technique and one risk financing technique for each exposure identified
Define risk control and discuss its role in the risk management process ANS -Any conscious action or
inaction to minimize, at the optimal cost, the probability, frequency, severity, or unpredictability of loss
Role of Risk Control in Risk Management Process ANS -A. Identification methods B. Incident analysis C.
Cost-benefit analysis
Risk Identification Methods (acronym) ANS -CCCLIPPEFF
Risk Identification Methods (detail) ANS -Checklist and survey
Compliance review
Contract review
Loss data analysis
Insurance policy review
Physical inspection
Procedures and policies review
Experts
Financial statement analysis
Flowchart
5 Primary Types of Risk Control Techniques (Acronym) ANS -TARPS
5 Primary Types of Risk Control Techniques ANS -1. Transfer 2. Avoidance 3. Reduction 4. Prevention 5.
Segregation/Separation/Duplication
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