Exam (elaborations)
RMIN 4000 UGA TEST 1 QUESTIONS AND ANSWERS 2024
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RMIN 4000 UGA TEST 1 QUESTIONS AND ANSWERS 2024
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RMIN 4000 UGA TEST 1social insurance programs - ANSWERS--social security, unemployment, workers
comp
-financed entirely or in large party by contributions from employers and /or
employees
-In favor of low income groups
other govt' insurance programs - ANSWERS--found at both the federal and state
level
-examples: federal flood insurance, state health insurance pools
social benefits of insurance - ANSWERS--indemnification for loss
-reduction of worry and fear
-source of investment funds
-loss prevention
-enhancement of credit
social costs of insurance - ANSWERS--cost of doing business:
an expense loading is the amount needed to pay all expenses, including
commissions, general administrative expenses, taxes, acquisition expenses, and
for contingencies and profit
,-fraudulent claims
-inflated claims
captive insurer - ANSWERS-insurer owned by a parent firm for the purpose of
insuring the parent firm's loss exposures
-single parent captive
-association or group captive is owned by several parents
Retention advantages - ANSWERS--save on loss costs
-save on expenses
-encourage loss prevention
-increase cash flow
retention disadvantages - ANSWERS--possible higher losses
-possible higher expenses
-possible higher taxes
non-insurance transfer - ANSWERS-method other than insurance by which a pure
risk and its potential financial consequences are transferred to another party
example: leases, contracts, hold holdharmless agreements
, non-insurance transfer advantages - ANSWERS--can transfer some losses that are
not insurable
-less expensive
-can transfer loss to someone who is in a better position to control losses
non-insurance transfer disadvantages - ANSWERS--contract language may be
ambiguous, so transfer may fail
-if the other party fails to pay, firm is still responsible for the loss
-insurers may not give credit for transfers
deductible - ANSWERS-specified amount subtracted from the loss payment
otherwise payable to the insured
excess insurance policy - ANSWERS--the insurer pays only if the actual loss
exceeds the amount a firm has decided to retain
rate - ANSWERS-price per unit of insurance
exposure unit - ANSWERS-unit of measurement used in insurance pricing
actuary - ANSWERS-rates and premiums are determined by this using company
past loss experience and industry statistics
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